Luxury hotels slash VIP benefits to brace for lackluster year

Popular hotel chains are tightening criteria for VIP memberships and slashing generous benefits in a move to brace for lackluster sales next year, according to industry sources on Tuesday.

Starting Jan. 1, Lotte Hotel, the nation’s largest hotel chain, will raise the bar to qualify for its Rewards Membership.

Currently, classic, silver, gold and platinum memberships are awarded based on the customer's number of stays at Lotte chain hotels nationwide.

A customer must now stay over at a hotel 10 nights a year to qualify at the gold level, and 20 times for platinum. But soon, the criteria will be raised to 25 nights per year for the gold membership and 50 nights for platinum.

Membership benefits will also be reduced. For instance, there will be a time limit on the currently unlimited late checkouts, while a fee will be charged during the summer holiday season in July and August.

Lotte’s crosstown rival Walkerhill Hotel & Resort will be raising its annual membership fee for the first time in three years.

The hotel’s cheapest membership card, called WPC Oak, with an annual fee of 450,000 won ($346) has been raised to 500,000 won, while the fee for the most prestigious WPC Noble Fine membership card has been raised from 1.6 million won to 1.7 million won.

The nation’s largest department store chain, Shinsegae Department Store has also recently stopped issuing free beverage coupons at its Members Bar, which could be used by customers whose annual purchases exceed 4 million won. They were previously offered 10 free drinks per month.

The reduced benefits for VIP members at major hotels and department stores come as local retailers offer a negative outlook for next year’s consumer sentiment overall.

In a recent survey by the Korea Chamber of Commerce and Industry, local retail business owners predicted an average of 1.8 percent growth in the retail sector next year, compared to this year’s estimated 5.9 percent growth. High inflation and rate hikes were cited as key factors.