Luxury Hotels In Seoul Losing Profits Due to Loss of Japanese Customers

It looks like if you ever wanted to stay in a Seoul luxury hotel now is the time:

Luxury hotels here are struggling as profits dwindle amid a marked decline in high-rolling Japanese customers.

Lotte Hotel, the biggest hotel chain in Korea, saw operating profit fall by half last year to W24.3 billion (US$1=W1,071). Hotel Shilla, a favorite choice of visiting foreign dignitaries and heads of state, posted an operating loss of W20.6 billion last year.

The W Seoul Walker Hill Hotel on the eastern edge of Seoul, a popular destination for foreign tourists, earned a paltry W12 million in net profit last year. Shinsegae, which operates luxury hotels in downtown Seoul and the southern port city of Busan, saw operating profit fall to W4.1 billion last year, less than half of what it earned in 2013.

From 2009 to 2012, the number of Japanese visitors rose from 3 million to 3.52 million, but it fell to a 10-year low of 2.28 million last year as Seoul-Tokyo relations chilled and a weak yen made Korea more expensive.

Instead, the number of Chinese tourists soared from 710,000 in 2005 to 6.13 million last year, but they prefer to more affordable accommodation, such as business hotels or guest houses.

“A majority of five-star hotels have seen a 30-percent decline in the number of Japanese guests. In some hotels the number fell 50 percent, while the increase in Chinese guests has been minimal,” one luxury hotel staffer said.  [Chosun Ilbo]

You can read the rest at the link, but in response to all the empty rooms the major luxury hotels are now offering some rooms at 50% off their normal prices just to get someone in the room to make up for the losses.