Korean Crisis Lowers Room Rates, Raises Biz Lift
<B> Korean Crisis Lowers Room Rates, Raises Biz Lift</B>
By Judy Jacobs
The economic crisis in Korea is expected to yield both short-term and long-term benefits for corporate travel managers in the United States.
The immediate perk is cheaper hotel rooms. Beyond that, the financial crisis here has forced the government to rethink its policies and allow for more foreign investment, which no doubt will lead to more inbound business travel.
On the hotel front, room rates this spring experienced a dramatic drop over last fall, an equally popular season for inbound travel.
And although rates are now being quoted in U.S. dollars, they remain a bargain when compared to prices in the past year. According to Pro Hotel Reservations, a Los Angeles-based reservation service that handles 120 hotels in Korea, a room at the Inter-Continental Seoul was pegged at $200 a few months ago; now it's priced at $165. A room at the Renaissance this month is $146, a $44 drop from the going rate in the fall.
Kevin Malloy, managing director of the Westin Chosun, said the price cuts go beyond Korea. "Rates of great value can now be found throughout Asia. Westin hotels in Asia/Pacific are offering Asia ValueStays rates that are valid until Sept. 15. It's just $125 per night at the Westin Chosun, based on a 21-day advance booking."
Malloy also expects increased lift from abroad as a result of efforts by the government of Kim Dae Jung to improve the international business climate. "The new government in Korea recently lifted many obstacles for foreign investment," he said.
Foreign nationals, for example, now can own land and participate in local investment opportunities. The government will allow foreign shareholders of companies to increase their holdings from 30 to 50 percent. This may lead to more mergers of foreign interests with Korean companies and faster economic recovery.
"In addition, the government has declared support for 200 strategically selected foreign firms to invest in Korea," Malloy said. "The selected multinational business groups will be offered special business opportunities by the Korean government, such as simplified procedures to obtain licenses and lease land." This ultimately should help increase business travel, which is already on the upswing.
"Right now, the hotels in Seoul are running at a higher capacity than they have in many, many years," according to Peter Blyth, co-president of Radisson Hotels Worldwide, which just completed its first franchise agreement in Korea. "There are a lot of people who are looking for opportunities to capitalize on the economic situation in Korea."
Tapping into corporate demand, the Westin Chosun is improving its business product. "Business travelers make up 84 percent of our total market," Malloy said. The hotel earlier this month refurbished 116 guest rooms on its four Executive Club floors to "further strengthen the position of the Westin Chosun," he added.