Top chains open business hotels

By Kim Tae-jong

Big hotel brands are expanding their scope by establishing new hotel branches amid a steady rise in foreign tourists here, mainly from China and Japan.

Some five-star hotels are constructing new accommodation while others are seeking partnerships with building owners or private equity firms for various projects.

Hotel Shilla is joining hands with the owners and equity firms to set up upscale business hotels.

The hotel is responsible for management and owners provide their building, while they share profits.

“We are now in talks with building owners to operate new businesses and some of them have shown some progress,” said an official from Shilla. “Details vary depending on the different partnerships, but we definitely want to expand our business.”

The first project by Shilla is expected to begin at a new building in Dongtan, Gyeonggi Province, whose construction is due for completion by August next year.

The new hotel, which is being built by KCC Engineering & Construction will have 300 rooms.

Another project is also under way in cooperation with KT Estate, an affiliate of KT Group. It also will have 300 rooms and be located in Gangnam, southern Seoul.

Industry sources said Shilla is planning to launch a new brand “Stay” as an additional hotel business, but the official said nothing has been decided yet.

Such projects by five-star hotels here come as demand for middle-class hotels is increasing due to the rise in tourists and businessmen from overseas.

Currently, there are only 140 hotels in the capital with a combined capacity of 24,000 rooms. This is far less than what is required, considering the government’s aim to attract more than 10 million foreign tourists this year.

In a simple calculation, experts say there will be a net shortage of 27,000 hotel rooms if the number of foreign tourists visiting here exceeds the 10 million mark.

Along with Shilla, Lotte Hotel also plans to add new hotels _ one on Jeju Island in 2013 and two more in Cheongryangri and Seocho in Seoul in 2015.

Lotte opened its first new business hotel with 284 guestrooms under its brand in Mapo, Seoul in 2009 and another one with 190 rooms in Gimpo, Gyeonggi Province last December.

International hotel chains have also showed interest in the operation of business hotels here.

Accor Ambassador Hotel signed agreements to open three additional franchises in Korea last year. The international brand plans to operate 20 hotels here by 2015.

Mercure Ambassador Gangnam in Yeoksam, southern Seoul, which has 288 guestrooms, will open in May. Ibis Ambassador Insadong is scheduled to open in May 2013 with 360 guestrooms, while Novotel Ambassador Seongbuk is slated to open by 2015.

Shopping malls in Seoul have also joined the fever to accommodate foreign travelers by transforming themselves into a decent business hotel.

Two shopping malls in Myeongdong ― Milgliore and M Plaza will be remodeled into business hotels.