COVID-19 changes landscape for travel, vacations
Domestic hotels, resorts cash in on prolonged pandemic
By Jun Ji-hye
Lee Min-hye, 37, who works for a trading company in Seoul, used to take an overseas trip every year for her summer vacation, visiting exotic places to get away from the bustling city life.
This summer, she was planning a trip to the Grand Canyon and western U.S. cities with her husband, looking forward to having fun adventures there, but they had to abandon the plan due to the COVID-19 pandemic.
“Instead, my husband and I decided to spend our summer vacation at a five-star hotel in Seoul that recently released a summer package, because we wanted to enjoy a vacation and take a rest anyway,” she said.
The hospitality sector is one of many industries to have been hit hardest by the coronavirus outbreak, along with airlines and airports.
But the situation facing domestic hotels and resorts appears to have improved compared to other industries in time for the summer vacation season ― usually between June and August in Korea ― as an increasing number of people are seeking to spend their holidays at local venues, being unable to travel abroad due to lockdowns imposed to halt the spread of the coronavirus.
According to Hanwha Hotels & Resorts (H&R), the hospitality arm of Hanwha Group, its average booking rate for suites nationwide stood at about 95 percent for July and August, as of July 16.
The figure is notable, considering the booking rate for cheaper standard rooms stood at about 80 percent ― usually, these are sold out first, according to the company.
“People have experienced many changes in their lives amid the pandemic,” a Hanwha H&R official said. “They are saving money that would have been spent on overseas trips. They are also worried about infections. These factors have led to an increase in demand for more private, luxurious and safer rooms.”
A survey by the firm showed that more than 90 percent of guests who stayed in suites expressed satisfaction, the official said, noting that his company is working to expand its suites in response to the increasing demand from domestic customers.
“We are working to remodel our standard rooms, including 70 at Hanwha Resorts Gyeongju, to increase the number of suites,” the official said. “We are aiming to build more than 370 suites by the end of next year.”
Other luxury hotels are seeing a similar trend.
The InterContinental Seoul COEX said the number of Korean guests who have booked rooms on weekdays for June and August was more than three times that of last year.
“Previously, Korean guests stayed mostly on weekends. But, following the outbreak, people seem to prefer weekdays that are less crowded,” a hotel official said.
The Park Hyatt Seoul saw a more than 60 percent increase in the number of Korean guests in June alone.
Officials in the hotel industry note that the rise in the number of the guests has also led to an increase in the number of customers at their restaurants.
“There has been a considerable increase in the number of guests who opt for a dinner buffet, although that requires an additional payment,” the InterContinental Seoul COEX official said.
This is considered a notable achievement, considering the domestic food service industry is still having a hard time due to the pandemic.
Timely services
Although hotels have been taking advantage of the summer vacation season on the back of an increase in demand for domestic travel, their total booking rate for the year so far has almost halved compared to 2019 due to a significant fall in the number of foreign tourists.
According to data offered by the Korea Hotel Association, foreign guests staying at hotels in Seoul in 2019 accounted for 63.3 percent, but the figure has nosedived this year.
Korea Tourism Organization statistics show that 83,497 foreign nationals entered Korea in March, a 94.6 percent decrease from last year.
An official from a five-star hotel in the affluent district of Gangnam said foreign tourists and businessmen had accounted for about 70 percent of total guests at her hotel until last year, but it has become uncommon to see foreign guests this year.
“An increase in the number of Korean guests this summer has somewhat made up for a fall in the number of foreign guests, but is not enough for us to rebound,” she said.
Securities companies have also provided gloomy assessments for the industry for the second half of the year.
KTB Investment & Securities estimated that Hotel Shilla, which operates luxury hotels and duty-free shops, would report an operating loss of 63.2 billion won ($52.5 million) for the second quarter of the year.
“It is yet to be seen whether travel demand rebounds after the COVID-19 situation stabilizes in the medium and long term,” analyst Bae Song-yi said.
In bracing for the public health crisis that could persist even longer, domestic hotels have been striving to come up with uniquely distinguishable and timely services.
Some hotels including Moxy Seoul Insadong have released promotions targeting those who work from home amid the pandemic, allowing them to use an exclusive lounge to do work.
Hanwha H&R has implemented a variety of contactless services such as a drive-through service that allows customers to collect meals offered by hotel restaurants in a more convenient way.
“The hotel, leisure and service industries are facing an enormous change following the coronavirus outbreak,” the company official said. “We are doing our best to be prepared for the post-COVID-19 period.”