Seoul Hotels Double in Value as 19 Million Tourists Chase Too Few Rooms

The median price of a Seoul hotel room sold for ongoing operation doubled from 250 million won in 2022–2023 to 500 million won in 2024–2026, according to CBRE Korea's new report on the Seoul hotel market — and the firm expects demand to keep outrunning supply through the late 2020s.

The math behind that jump is blunt. Foreign visitors to Korea climbed from 17.5 million in 2019 to 18.94 million in 2025, and arrivals from January through September this year ran 21.5% ahead of the same period last year. Seoul's hotel room supply, meanwhile, grew an average of 8.5% a year from 2010 to 2019 — then collapsed to 0.1% a year between 2019 and 2025.

That's a demand wave hitting a wall.

CBRE Korea's report, titled "Seoul Hotel Market Value and Value-Add Strategy," projects only a 7% increase in Seoul's hotel room supply through 2032. Roughly 3,900 new rooms are slated to open by then, and 44% of them sit in Gangnam and Yongsan as upper-tier properties. Mid-priced hotels — where most ordinary tourists actually stay — will stay scarce.

Why can't supply catch up?

Building takes time. Construction costs are heavy. Seoul city has eased regulations such as floor-area ratios to allow bigger hotels on the same land, but CBRE reckons permitting and construction timelines mean real new rooms won't arrive before 2029 at the earliest.

The squeeze has already rebuilt hotel economics. Average occupancy at Seoul hotels hit 76% last year, up 4 percentage points from 72% in 2019. With occupancy near its ceiling, operators are pushing room rates to capture revenue — the classic lever when you can't add keys.

What does this change for investors?

The playbook has shifted. In the past, buyers often purchased hotels, demolished the buildings and redeveloped the land for other uses. Now, the report finds, they keep the existing building and swap the brand instead.

The showcase is Boco Seoul Myeongdong. The property sold for 228.2 billion won just a year and a half after closing. An investor bought it, brought in a global brand, upgraded the facilities, and resold it this June for 368.6 billion won. Per-room price rose from 400 million won to 640 million won in about two years.

Operating-contract economics frame the decisions. Under management contracts, owners pay 5–7% of total revenue; franchise agreements cost 3–5% in fees. Financing is the other variable — CBRE points to forecasts that the base rate will climb to an annual average of 3.5% in 2027, raising the cost of leverage for anyone buying at today's doubled prices.

"Seoul hotels are now an investment asset evaluated alongside major sectors like offices and logistics," said Choi Sung-hyun, managing director and head of capital markets at CBRE Korea. "With occupancy near its peak and borrowing rates rising, future returns have to come from the asset itself — brand conversion and the choice of operating model matter."

His framing cuts to the core of the trade. You can no longer count on occupancy gains or cheap debt. The remaining margin lives in picking the right flag, the right contract structure and the right renovation spend.

The report's own demand outlook — supply lagging demand through the late 2020s — suggests the window for those value-add plays stays open, but at steadily higher entry prices.