"No Rooms Available": Seoul Hotels Packed with Foreign Tourists

As the number of foreign visitors to South Korea continues to rise, the Seoul hotel market is booming. Over the past four years, inbound tourism has grown sharply, and hotel room occupancy rates in Seoul have climbed just as noticeably. However, with foreign tourism demand increasingly locked into the capital, observers argue that policies to disperse demand by boosting regional tourism will be essential in the long term.

According to industry data on the 11th, the number of foreign tourists plummeted during the COVID-19 period but has surged since the pandemic eased. Inbound visitors fell to 967,003 in 2021, then rebounded to 3,198,017 in 2022, a 230.7% increase from the previous year. The figure jumped again to 11,031,665 in 2023 (up 245%), 16,369,629 in 2024 (up 48.4%), and 18,936,562 in 2025 (up 15.7%). Foreign tourist spending also expanded from 4.3072 trillion won in 2022 to 17.4089 trillion won last year, roughly a fourfold increase.
Seoul hotels have been the biggest beneficiaries of this surge in foreign visitors. As the share of foreign guests at major properties in the capital has risen sharply, room occupancy has remained at very high levels. Lotte City Hotel Myeongdong and L7 Myeongdong by LOTTE, for example, reported that foreigners accounted for around 70–80% of guests as of February this year. At The Shilla Seoul, more than half of all guests are now from overseas. Josun Hotels & Resorts has maintained an average occupancy rate of over 80% this year, and the proportion of foreign guests in February was about 18% higher than a year earlier.

Yet hotel construction requires massive investment, so supply remains limited compared with the rapid growth in tourism demand. Industry insiders say that the pace of hotel development in central Seoul is failing to keep up with the influx of visitors, creating a situation of chronic excess demand.
Despite recent headwinds such as rising oil prices, demand for travel to Seoul and average spending per visitor are expected to keep growing, driven by global interest in K-culture and the weak won. Jeong Ran-su, a professor in the Department of Tourism, Hanyang University, noted, "The government has set a target of attracting 23 million foreign tourists this year, but even if the actual number reaches only around 19 million, the Seoul tourism market will in effect be saturated." He warned, "If this saturation of tourists in Seoul continues, it could become a serious problem in the future." He went on, "The solution is either to disperse tourism demand or to increase accommodation supply, but hotels are subject to zoning and various other regulations, so expanding supply in a short period is very difficult." He added, "Government policies to support facility upgrades at general lodging businesses such as motels, and easing the primary-residence requirement for home-sharing services, could offer realistic alternatives."
The structural concentration of tourism demand in Seoul is another concern. According to the Korea Tourism Organization (KTO), about 70% of foreign tourist spending last year occurred in Seoul. Busan Metropolitan City and Incheon Metropolitan City, which ranked second and third, each accounted for only around 7%, while Jeju Island captured just about 3%. All other regions combined failed to reach even 1%. In effect, the growth in visitor numbers has become entrenched in favor of central commercial districts in Seoul.
Professor Lee Young-ae of Incheon National University’s Department of Consumer Science explained, "Foreign tourists are concentrated in Seoul because tourism content such as K-culture is clustered there." She suggested, "There is a need to expand programs that allow repeat visitors in particular to experience cultural and tourism resources outside Seoul." She added, "We also need to explore ways to naturally connect foreign tourists who have already visited Seoul with trips to regional destinations."
localplace@fnnews.com Kim Hyun-ji Reporter