Shinsegae to make breakthrough with hotel business on Jeju Island

Grand Josun Hotel on Jeju Island / Courtesy of Shinsegae Josun Hotel

By Kim Jae-heun

Shinsegae has flopped in the alcohol drink market with its new soju brand, “Pureunbam,” and has also delayed opening its duty free business on Jeju Island due to the COVID-19 outbreak.

The company's next big hope is to launch its Grand Josun luxury hotel in Seogwipo on Jeju.

Last year, Shinsegae secured the operating rights to the Kensington Jeju Hotel from SK D&D and has been remodeling it with a view to opening it as the Grand Josun by the end of the year.

There are mixed opinions on the outlook of Shinsegae's hotel business on Jeju, as the COVID-19 pandemic is showing few signs of abating, and the government still recommends people to stay at home to prevent any spread of the virus here.

Also, its rivals Lotte and Shilla are already operating luxury accommodations in the town, meaning the competition will be fierce there.

However, Jeju Island could be one of the regions with the highest resilience once the pandemic subsides. In the first week of May, when the country was still practicing social distancing, people flocked to Jeju Island during the long weekend to enjoy a vacation.

Oversea travel bans left limited options for vacationers, and Jeju Island was the top pick. Five-star hotels operated by Lotte and Shilla enjoyed unseasonable booms, and industry insiders believe the Grand Josun Hotel has a chance too when COVID-19 begins to fade.

The increasing trend of contactless consumption and travel is also a favorable factor for Shinsegae. More people are preferring to stay at private and premium hotels owing to social distancing practices, and the Grand Josun has much to offer in this context.

“The prolonged case of COVID-19 may not bring many customers to the opening of the hotel, but the demand is still there for people visiting Jeju Island, and its merit as a luxury hotel will attract people. The previous Kensington Jeju Hotel had loyal customers thanks to its high-end facilities including the infinity pool which was loved by young visitors,” an industry insider said.

Shinsegae withdrew from a real estate deal for a duty free store in January after the COVID-19 outbreak began. The Korea Customs Service decided not to hold a meeting to grant new duty free business licenses, and Shinsegae could not just begin constructing a building, and so paid a 2 billion won cancellation fee.

However, it has not totally given up on its duty free business on the island, and will seek another chance after the pandemic.