By Kim Tae-jong
Staff Reporter
Rep. Byun Jae-il of the opposition Democratic Party (DP) recently made public data about Seoul's hotel rates, which he received from the Ministry of Culture and Tourism, showing them to be the most expensive among 10 major Asian cities.
Many people don't doubt this, but industry experts and local hoteliers claim that this is a myth that has given overseas tourists the impression that Seoul is an unfavorable place to visit.
``I don't know exactly how they calculated the Seoul's hotel rates as it is important which hotels they took in which season and if they considered the package deals,'' Keum Ki-yong, a research fellow of the Seoul Development Institute (SDI), said. ``Seoul can be an expensive city to visit for foreigners but Seoul's prices are often overestimated by private research firms.''
The ministry's information was based on the 2007 Corporate Travel Index, which said it cost $235 on average to stay at a hotel in Seoul, making the city the most costly among 10 major Asian cities.
According to the index, per-night hotel costs were $205 in Tokyo, $193 in Hong Kong, $174 in Taipei, $159 in Shanghai, $152 in Beijing, $152 in Osaka and Kobe, $149 in Singapore, $133 in Bangkok and $112 in Hanoi.
But Keum pointed out that few domestic hotels charge guests based on standard room rates, as special discount programs are available all year round. He claimed that many international reports contain the wrong information on prices of Seoul's hotels in comparison with other cities.
Mercer Human Resource Consulting has ranked Seoul as the third most expensive city among 143 cities in terms of cost of living in 2007 after Moscow and London. Business Travel News has ranked Seoul as the most expensive city in Asia and 8th in the world in its 2008 Corporate Travel Index.
But when comparing five-star hotels, the cost in Seoul is actually more moderate, Keum said.
``The comparison should be done in similar categories, like the same Hyatt or Hilton chains in different cities. Then, Seoul is actually not that expensive,'' he said. ``Such misleading information is one of factors that keep tourists from visiting Seoul.''
His recent survey showed Seoul's accommodation price level ranks ninth in 10 major international cities.
In terms of room rates of business hotels, London is the most expensive city at $325, while Beijing ranked 10th at $78. Rooms in Seoul cost $123, he said.
But he pointed out that Seoul lacks economy middle-sized hotels, which can be a problem in attracting more inbound travelers.
``Luxury hotels naturally target high-end customers. Prices are not such a huge factor for them in choosing a hotel. But it is important to give travelers various options for accommodation. That can help tourists think that they can stay in Seoul in more affordable way,'' he said.
The government has also been seeking a way to boost the hotel industry as part of a project to boost the competitiveness of the country's tourism sector.
Last year, it cut the value added tax rate to zero from 10 percent on hotel rooms for foreign tourists for a limited period of time and then extended this to the end of next year, following hoteliers' appeal.
The nation first introduced the system, which cuts the tax for foreigners and thus reduces the hotel rate for them, for limited periods, such as the 1994 Visit Korea Year and the 2002 World Cup.
But domestic hotels are asking the government to take a more practical approach to help boost the industry ― cutting value-added tax for foreign guests permanently and easing regulations on the hotel business.
They argue that one of the biggest problems is labor costs as the service business requires large manpower.
``From a long-term perspective, we should think about hiring migrant workers at hotels who can attend guests at restaurants and bars and clean rooms,'' Chris Lee, marketing director of the JW Marriott Seoul, said. ``Of course, we should prepare for cultural differences and language barriers if we hire people from other countries.''
Currently, the working visa for hotels is issued only to cooks and other key posts such as general managers and food and beverage directors.
``Having us simply reduce room rates is not a solution. People seem to think tourists don't want to visit Seoul due to the high room rates but the underlying issue is Seoul is less appealing as a destination to visit,'' he said.
To help boost the industry, Lee emphasized that the city has to make more effort to sell Seoul as a destination to visit full of cultural events.