Korean Luxury Hotel Group Targeting Midprice Market
<B>Korean Luxury Hotel Group Targeting Midprice Market</B>
By Robert Selwitz
Shilla Hotels and Resorts, whose Seoul and Cheju Island properties are among Korea's finest luxury choices, is launching a major effort to create a group of much-needed midmarket lodging options.
While Korea itself generally is much less costly for business travelers--particularly food and transportation--than most other Asian destinations, it has long lacked midprice lodging. But, spurred by rising commercial traffic and Korea's co-hosting of the 2002 World Cup Games, Young Ill Lee, CEO and vice president of Shilla Hotels & Resorts and Geoville Hotels, insists it now is time for a change.
"Here at our 509-room Shilla in Seoul, single rooms cost $250. But we see tremendous demand for quality properties priced in the $150 to $170 range," he said. His answer is Geoville, a group of up to 70 properties, 20 of which are planned to be open prior to June, 2002. These hotels will be located in some or all of the 10 Korean cities that will host World Cup sites. The remaining 50 should debut by 2005. Initial target cities include Chawon, Pusan, Seoul, Suwon and Woolsan.
"The properties will include 30 Geoville hotels and 40 Geolodge properties, which will be slightly less expensive," said Lee. "Most will operate under a franchise management system in which Shilla will provide development, management and marketing expertise in exchange for a royalty on room sales." The hotels will be contemporary and international in style, and will include both new-builds and conversions of existing properties.
Geoville hotels will offer 150 to 200 rooms, while Geolodge will have 70 to 130. The latter "will operate under the motto, 'Cleanliness, Efficiency and Value,' and will be similar to a cost-efficient grade of hotels that is popular in Japan but so far has never existed in Korea," Lee said.
Today, he added, "there is a shortage of middle grade hotels in Korea, and among those that already exist, there is certainly a shortage of expertise in catering to international travelers." Since Shilla has a well-established international reputation for operating top-quality properties, "we are ideally placed to provide this expertise to other properties throughout Korea and beyond."
Also emphasizing the need for moderate price hotel rooms is Jong Hee Kim, executive director of the conventions and events department for Korea National Tourism Organization. "Though we have plenty of rooms in Seoul and the metropolitan area, we suffer a major lack of such facilities in most smaller cities. Indeed, while we have hotels acceptable to Koreans, outside of Seoul there are few midrange properties that are up to international standards."
Seoul currently has about 100 hotels with 18,000 rooms, Kim said, "and that is absolutely insufficient considering the number of inbound visitors is increasing 5 to 10 percent annually. For 2002, we would like to induce 6 million inbound visitors. During 1998, we welcomed 4.2 million. Clearly, to reach our target before the World Cup begins, we need to add lots of rooms nationwide."
One reason for the optimism regarding an increase in visitation volume is that Korea recently has joined the short list of countries to which China let's its citizens freely travel. Others include Malaysia, Singapore, the Philippines and Thailand.
"Visitation will be very busy, in part because we expect the number of people arriving from China to sharply rise," agreed Lee. "After all, we're very clean, very affordable and just an hour's flying time from Beijing. And when these visitors come here, they will be seeking comfortable, less expensive properties, precisely the kind that Geoville and Geolodge will provide."
Other major travel tidings include the 2001 debut of the first phase of Inchon International Airport. Intended to replace Kimpo as Korea's prime international arrival site, it ultimately will be linked to downtown Seoul by high-speed rail that will make the trip in 50 minutes. The entire Inchon International Airport project will not be completed until 2020.
In addition, 2002 will be the first year for high-speed train service linking Korea's two most important commercial cities, Seoul and Pusan. The new trains are expected to cut in half the current four-and-a-half hour transit time.