Hotels Shaking Off COVID... Soaring with Year-End Rush + Banquets and Weddings

Social Distancing Lifted and Endemic Arrival Drive Surge in Banquet Demand
Occupancy Rates Recover to 70-80% Range... Revenue Recovery and Return to Profitability
Expansion of Christmas Season Packages and Preparation for Large-Scale Wedding Demand Next Year
Hotel Industry Hit Hard by COVID-19 Begins Full Recovery

[Asia Economy Reporter Yuri Kim] As we enter the endemic era (periodic outbreaks of infectious diseases), major domestic hotels have all received improved performance reports for the third quarter of this year. Seoul’s luxury hotels, which had limited operations due to COVID-19 restrictions, made significant progress in the second quarter following the lifting of social distancing measures and the resumption of corporate banquets.

◆ Occupancy Rates Recover to 70-80%... Revenues Returning to Normal

According to the hotel industry on the 16th, Shilla Hotel (Hotel Shilla Hotel & Leisure division) posted an operating profit of 26 billion KRW in the third quarter, a 2,789% increase compared to the same period last year. Operating profit, which was only 900 million KRW last year, improved significantly, causing the growth rate to surge. Revenue for the same period increased by 48% to 164.1 billion KRW.

Due to the COVID-19 pandemic, overseas business demand sharply declined, causing difficulties for Seoul Shilla Hotel and Shilla Stay. However, their occupancy rates improved to 68% and 83% respectively in the third quarter, resulting in revenue increases of 57% and 62% year-on-year. Jeju Shilla Hotel, which performed well due to a surge in demand for Jeju visits as an alternative to overseas travel despite the COVID-19 situation, also recorded an 8% revenue growth in the third quarter on a solid base.

Parnas Hotel also saw its operating profit soar by 7,600% to 23.1 billion KRW in the third quarter for the same reasons. Revenue increased by 111% to 104.4 billion KRW. The occupancy rates of Grand InterContinental Seoul Parnas and InterContinental Seoul COEX, which were only 36-42% in the third quarter last year, jumped to around 79%, and Nine Tree also recovered to about 82%. Parnas Hotel Jeju, which opened in July as a luxury resort-style hotel in Jungmun, Jeju, performed well with occupancy rates exceeding 60%.

Lotte Hotel and Chosun Hotel & Resort, which recorded operating losses in the third quarter last year, also turned profitable in the third quarter. Lotte Hotel posted an operating profit of 27.8 billion KRW in the third quarter, turning to the black. Revenue increased by 76% to 286.9 billion KRW. As the tourism industry recovery passed a turning point, performance improved mainly in domestic hotels, with revenue rising to levels similar to those before COVID-19. Chosun Hotel & Resort also turned profitable with an operating profit of 13.2 billion KRW in the third quarter, and revenue increased by 58% to 132.7 billion KRW. Ananti recorded its highest-ever quarterly revenue (90.9 billion KRW) in the third quarter this year, a 131% increase compared to the same period last year. Operating profit also turned positive at 39.4 billion KRW. Ananti officials explained, "Cumulatively for the third quarter, revenue reached 233.3 billion KRW and operating profit 79.9 billion KRW, achieving the best performance since the company’s founding."

◆ Year-End Peak Season + Expectations for Large-Scale Wedding Demand Increase

The industry expects a clear improvement in performance in the fourth quarter as well, driven by the year-end peak season, COVID-19 base effects, and increased corporate banquet and wedding demand. Major hotels are simultaneously launching year-end peak season packages and unveiling new presentations targeting next year’s wedding demand. In particular, the hotel small wedding trend that was popular during the height of COVID-19 is recently shifting back to large-scale weddings, which the industry views as positive for hotel revenues.

Grand Hyatt Seoul is preparing packages related to the hotel’s winter season symbol, the ice rink, to meet peak demand. Westin Chosun Seoul has launched packages including jewelry and related goods gifts suitable for the winter season. They have also engaged in food and beverage (F&B) marketing for the peak season. Luxury hotels offer special menus such as lobster and tomahawk steak at buffet restaurants around Christmas. Reservations for major time slots were fully booked soon after opening earlier this month. Fairmont Ambassador Seoul Hotel and others quickly introduced Christmas cakes this year and started early bird discounts.

With a surge in large-scale wedding demand, Grand InterContinental Seoul Parnas unveiled its 2023 wedding concept “The Royal,” beginning efforts to capture next year’s wedding market. It offers a grand wedding reminiscent of British royal weddings. A Parnas Hotel official said, "Small weddings were popular for a while due to the impact of COVID-19, but recently large-scale luxury wedding demand has surged again, so we prepared the 2023 wedding concept accordingly." Seamarc in Gangneung also launched a luxury promotion held once daily against the backdrop of the East Sea.

A hotel industry official said, "The hotel industry, which was directly hit by COVID-19, is recovering due to last year’s base effect, continued domestic staycation demand, and recovering overseas business and tourism demand," adding, "After returning to profitability this year, the industry will begin full-scale differentiation next year."

This content was produced with the assistance of AI translation services.