Luxury hotels hit by ‘Korea phobia’

High-end hotels in Korea are struggling with the COVID-19 outbreak, as guests cancel stays on concerns over possible viral infection.

Five-star hotels in Seoul are experiencing a rapid drop in occupancy rate, with locals canceling their staycation plans and foreign business travelers canceling business trips. Various events and meetings held at large-sized hotels are also being canceled or postponed. 

Local hotel franchise Lotte Hotels & Resorts -- with properties in Seoul highly popular among Chinese tourists -- has been hit hard by the outbreak of the contagious respiratory illness. From Jan. 23 to Feb. 17, around 50,000 stays have been canceled throughout the franchise’s 30 properties around the world.

The franchise is suggesting all its employees take an unpaid seven-day leave by April, as it did during the Middle East respiratory syndrome crisis in 2015. At the time, around 30 percent of employees used the unpaid leave.

Executive board members are returning 10 percent of their pay, the company announced on Feb. 21, a move expected to save some 85.7 million won ($71,700) a month.

Other luxury hotels in Korea are suffering similarly, but have been reluctant to speak up about their losses, worried that a negative image may stick.

“Hotels are worried about being branded with the image of failure and loss. Also, if hotels speak up about coronavirus concerns, guests may be disturbed,” an official from a five-star luxury hotel in Seoul said.

Though hotels may want to “keep things cool,” its restaurants are experiencing changes. Contamination concerns arose at a hotel buffet restaurant that patient No. 31 had visited, leading many hotels to shut down their buffet services.

Grand Hyatt Seoul’s all-day buffet restaurant The Terrace has closed its buffet stations and changed to set-course meals and a la carte offerings. InterContinental Seoul Parnas has shut down its all-day dining buffet restaurant Brasserie. Guests staying at the hotel can opt for the a la carte breakfast at the Sky Lounge.

Like hotels in Seoul, Park Hyatt Busan has seen a drop in its occupancy rate. Nestled in the heart of Busan, the global franchise hotel’s main customer base consists of business travelers.

“Most guests these days are local businessmen who could not cancel their business trips,” a hotel official said. The hotel has shut down its French fine-dining restaurant Living Room and guest breakfast is served a la carte.

Jeju Island, a popular tourist destination, has been hit hard by virus fears. In early February, Jeju Island suspended its visa-free entry program for Chinese nationals due to the virus outbreak. According to Jeju Tourism Organization, 125,241 tourists visited Jeju Island from Feb. 1-6, a 47.4 percent decrease from the same period last year.

With low occupancy rates and safety concerns, Hotel The Shore Jeju shut down its Terrace Cafe dinner buffet. The Shilla Jeju has shut down the Gymboree Kid’s Club for toddlers and its Korean fine-dining restaurant Cheonji.

While many people are canceling travel plans domestic or international, there are also local guests ready to take advantage of the situation, staying at luxury hotels at a discounted price.

“There are local guests who are making new reservations as the prices are low. Also they say that hotels are safer as they are strict with disinfection, and spaces are not crowded,” a hotel official said.

By Im Eun-byel (silverstar@heraldcorp.com)