As Chinese tourist-shoppers have been shunning Hong Kong in favor of nearby destinations Japan and South Korea over the past year, global hotel conglomerate Starwood is betting on long-term South Korea growth with its hotel expansion.
On May 1 of this year, Korean duty-free and department store company Shinsegae, which owns Starwood’s Westin properties in Seoul, opened the company’s new Sheraton Four Points Namsan near the busy hub at Seoul Station with a focus on international guests. The location was chosen for its close proximity to both the airport train and major shopping centers, and most of its Chinese guests are leisure travelers coming to shop, says Daniel Lee, the hotel’s director of sales and marketing.
Although Four Points is generally regarded as a business hotel, most Chinese guests “prefer the location for shopping and sightseeing,” he says, noting that the hotel aims to attract a growing contingent of independent Chinese travelers. “Tour groups are not a big focus of our hotel. We are focusing on individual travelers,” he says. Within close walking distance from Seoul Station, which Lee says is Seoul’s most popular shopping area for Chinese shoppers (he estimates that 95 percent of Chinese tourists in Seoul visit), the location is especially convenient for DIY Chinese travelers.
The new location for Starwood’s young and rapidly growing Four Points brand is part of a mixed-use development and features 342 rooms along with restaurants, a bar, a fitness center, and business facilities. The hotel focuses on guest loyalty with amenities such as large rooms, comfortable beds, free WiFi, and craft beer.
The opening of the new location coincided with the start of the MERS crisis that caused a 45 percent plunge in Chinese tourist numbers in June, but South Korea was previously seeing significant growth. “Chinese guests have increased every year in the Korean market, so they’re a very important segment in Korea,” says Lee. In 2014, South Korea was the number one foreign country visited by Chinese travelers, with Seoul and Jeju Island being popular shopping and sightseeing destinations.
In order to attract more Chinese visitors, Starwood and Shinsegae have created several China-focused marketing efforts and amenities. The Four Points location has been in the process of hiring multiple Mandarin-speaking staff members and features Chinese breakfast items at its extensive buffet. In addition, Shinsegae has been bringing in Chinese travel bloggers to inspect the Four Points and Westin locations, and partners with online booking sites such as Ctrip.
“I think internet booking will be increasing more and more” for Chinese travelers, says Lee, stating that Ctrip and Booking.com have been strong sources for bookings from China.
For the second half of 2015, South Korea is focusing on recovering its Chinese tourist numbers numbers now that the MERS crisis has passed. The country has waived visa fees for Chinese tourists, and the mayor of Seoul and the governor of Jeju embarked on a promotional tour in China at the beginning of this month.
In the long-term, however, South Korea has many key advantages with China’s outbound travel boom. In addition to the lower luxury prices that make it an attractive shopping destination, Chinese travelers are known for being attracted by the power of hallyu, or an obsession with Korean pop culture. Quick and inexpensive direct flights from China also appeal to travelers aiming to maximize limited trip time. As Hong Kong loses its luster with mainland tourists, hoteliers like Starwood are banking on the long-term potential for Chinese traveler growth thanks to these factors.