Seoul hotels get a wake up call.Korea takes steps to tackle hotel room shortfall.
KOREA: In an effort to tackle the hotel room shortage President Kim Dae-Jung has ordered the government to allow the construction of new hotels in previously restricted green areas in Seoul.
President Kim also promised to lift the heavy-traffic-causing penalty on new hotels constructed before 2002.
Korea will host the football world cup in 2002. The tourism industry has raised concerns about a hotel room shortage.
"We promise all possible assistance to new hotels, as the nation would otherwise face a 50,000 hotel room shortage in 2002,'' said President Kim at the tourism-promotion cabinet meeting.
Minister of culture and tourism Park Ji-won said Seoul's 23 designated "green areas" would be attractive sites for hotel development.
Large hotels in Seoul must pay a heavy-traffic-causing penalty. This can amount to 9 billion won annually.
Hoteliers welcomed the moves to lift the burden, but said more should be done.
Heavy-handed regulations and taxes are often cited as reasons for denying the construction of new hotels in Seoul.
With the exception of the newly-constructed COEX Inter-Continental practically no superdelux hotels have been constructed in Seoul since the end of the 1988 Olympic Games.
While local conglomerates tend to shy away from the hotel business, foreign companies are entering the market. In March, 2000, a JW Marriott will open. In October, Marriott signed a management contract with the Pusan Hyatt Regency Hotel. And the company is also considering plans to build a new property in southern Seoul.
Daewoo Development Co. recently announced that it has selected Singapore's Hongleong Group as the preferred negotiator for the sale of the Daewoo affiliate Seoul Hilton.
Hongleong Group, a real estate investment company with shares in over 60 hotels worldwide, will decide whether to buy Seoul Hilton at the directors' meeting in the weeks ahead, said a Daewoo spokesman.
The asking price will be around $200 million and Daewoo will use the money to reduce debts of Daewoo Corp., a shareholder of Daewoo Development.