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Jejudo faces oversupply of lodging
Publication Date : 06-03-2014
South Korea’s southern resort island of Jejudo faces an oversupply of hotel rooms, according to local officials and industry insiders.
As more and more tourists complained about the difficulty of booking rooms due to a shortage of hotels, the Jeju government eased regulations and stepped up efforts to attract builders and investments. However, their efforts seem to have gone too far.
“Hotel rooms have outnumbered tourists. Unless the number of tourists increases remarkably, we will have a problem,” said an official of the Jeju Special-Governing Province government who is in charge of managing and issuing construction permits to developers, on condition of anonymity.
Jeju hoteliers are not so upbeat about the increase in tourists.
“An excessive number of hotels have been built on Jeju. But there might not be an equivalent increase in tourists due to several negative factors such as the North Korean issue, local elections and the weather,” said Nam Kyung-tak, sales manager at Lion Private Town on Jejudo Island.
Weather on Jejudo Island is fickle compared to many foreign resort islands, with typhoons almost every year and sudden wind gusts.
Last year, a total of 16,265 rooms at 191 hotels and other types of lodging were added on Jejudo Island, a 33 per cent increase from 2012. The number of travelers to the island increased 43 per cent from 7 million in 2010 to 10 million in 2013, while the number of accommodations added over the same period surged 75 per cent.
Industry insiders expressed concerns that the current growth in the number of hotel rooms could damage the island’s accommodation sector.
“Things will get worse during off-season, from November to March. To fill empty rooms and draw guests, hotels will have to lower room rates. More hotels will struggle to make ends meet because staff salaries and utility prices continue to go up,” said Jang Jung-hun, chairman of Daekuk Isleinn Hotel, who also teaches in the tourism management department at Jeju National University.
Jang expects the number of hotel rooms to continue to increase until the end of 2015. The special law to stimulate expansion of hotel facilities implemented by the Korean government will be effective until Dec 31, 2015.
“We don’t know how many hotels will go empty after that,” Jang added.