The term guesthouse is not defined by law and is used in the lodging market as a general term for lodging establishments that operate in a specific manner. However, because there are no separate facility and registration standards, the facility composition and operation systems differ by country.
Generally, guesthouses appear in two types. The first type operates as a dedicated lodging establishment without residents, similar to a hotel but at a cheaper price. The second type offers spare rooms in a residence, where a resident lives, at a low price. In the second case, it is common for the areas used by the resident and the travelers to be separated.
The reason guesthouses are offered at low prices is that costs are minimized by minimizing services. Typical examples include providing multiple beds in one room in the form of bunk beds (stacked twin beds) to share the room or installing bathrooms, living rooms, kitchens, etc., as shared facilities instead of in each room. Additionally, in most cases, there are no separate amenities.
Due to the low price, guesthouses are a type of lodging establishment favored by those who need affordable accommodation, such as backpackers. Therefore, the proportion of foreign demand is relatively high, and in Korea, ‘urban minbak’ has the most similar characteristics. In fact, the name of urban minbak often includes guesthouse, or they are classified and distributed as guesthouses in distribution channels.
However, the inclusion of guesthouse in the name of the establishment or classification and distribution as a guesthouse in distribution channels does not necessarily mean it is an urban minbak. The proportion of urban minbak in the supply of lodging establishments in Korea is minimal, and there are no legal restrictions on using the name guesthouse. In reality, the majority of lodging establishments that include guesthouse in their name or are classified and distributed as guesthouses in distribution channels are residential lodging.
