 |
Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] SEOUL, Aug. 20 — The Korean hotel market is showing growing signs of polarization, with Seoul hotels benefiting from the rebound in inbound tourism while regional hotels continue to face difficulties due to sluggish domestic demand.
According to investment banking sources, the planned sale of Shilla Stay Haeundae, a 407-room, four-star hotel in Busan’s Haeundae district, attracted no bidders at its auction on August 19. Despite its prime location near Haeundae Beach and relatively stable operations compared with nearby competitors, the hotel failed to generate investor interest, reflecting the slow recovery of tourist inflows to Busan. The seller, IGIS Asset Management, is expected to either seek buyers directly or extend the maturity of its investment fund.
Other regional hotel transactions have also stalled. Parnas Jeju Hotel received limited interest during its April auction, with Korea Investment & Securities — the existing stakeholder — as the only potential buyer. The sale was eventually withdrawn, and a KRW 230 billion refinancing deal was arranged, with the possibility of a renewed sale at a later date.
Similarly, the sale of Shilla Stay Dongtan, managed by Mirae Asset Global Investments, collapsed after the preferred buyer, BlueCove Asset Management, failed to secure financing during the negotiation period.
By contrast, Seoul hotels continue to attract strong attention from global and domestic institutional investors, buoyed by surging foreign visitor arrivals. The divergence underscores how Korea’s hospitality market is increasingly split between capital-city assets with stable tourism demand and regional hotels struggling with weak local consumption.
알파경제 Paul Lee 특파원(hoondork1977@alphabiz.co.kr)
