Research
South Korea hotel investment outlook 2025-2026
Strong performance metrics and rising investor interest signal continued growth.
February 19, 2025
South Korea's hotel industry is set for continued growth in 2025 and 2026, despite domestic political uncertainties in late 2024. The market is expected to fully recover by mid-2025, driven by robust tourism demand, limited supply, strong operational performance, and increasing international investment. JLL Hotels & Hospitality Group's report presents the following trends and outlook for the Korean hotel investment market for the near term:
- Tourism Demand Diversified: While Chinese visitation remains below 2019 figures, the continued recovery in visitation signals a positive diversification of source markets.
- Expansion of Luxury Hotel Supply: 4- and 5-star hotels now account for 30% of total accommodations in Seoul, confirming a trend towards luxury. Over 2,800 luxury hotel rooms are planned for addition by 2030. Most of these new supplies are scheduled for completion after 2028, and may be delayed further.
- Continued Hotel RevPAR Growth: Luxury hotels recorded a 14.4% year-on-year increase in RevPAR, while midscale segment also surpassed pre-pandemic levels with a 23.4% increase. In 2025, luxury hotels are expected to see 5-10% RevPAR growth, while midscale hotels are projected to grow by 10-20%, though the pace of growth is expected to moderate.
- Foreign Capital Fueling Active Transaction Market: The total transaction volume reached KRW 1.63 trillion in 2024, more than 3X the 2023 figure. In 2025, hotel transactions are expected to reach about KRW 2.2 trillion, driven by strong operational performance, interest from foreign investors, and anticipated interest rate cuts.
For a comprehensive analysis of market trends, investment opportunities, and strategic insights, download JLL's full 2025-2026 Korean Hotel Investment Outlook report.
