Literacy > Lodging Glossary > Residential Lodging

Residential Lodging

A residential lodging refers to a lodging establishment registering and operating a residential lodging property as a residential lodging business pursuant to the ‘Public Health Control Act’. It targets long-term stay guests, sharing similarities with family hotels and timeshares. Due to its tendency towards fractional ownership structure, it has become a representative type of so-called ‘fractional ownership hotels.’
Customary Definition
From a property perspective, residential lodging properties are equipped for long-term stays and typically charge on a weekly basis rather than daily. In terms of ownership and operation structure, they are similar to condo hotels in the United States, where each room is owned separately by different entities.
Source: STR Glossary
Statutory Definition
Residential lodging properties refer to buildings registered and operated as 'residential lodging businesses' pursuant to the Enforcement Decree of Building Act, and 'residential lodging business' refers to a business that provides facilities (including cooking facilities) and services for guests to sleep and stay pursuant to Article 4, Paragraph 2 of the Enforcement Decree of the Public Health Control Act.
Lobin Commentary

The concept of residential lodging establishments emerged in the mid-2000s when some officetels operated as lodging establishments without registering as such under the ‘Public Health Control Act,’ leading to controversy. At that time, lodging establishments with cooking facilities already existed in the form of family hotels and timeshares. However, since designating the building use as ‘lodging properties’ and registering as tourist lodging pursuant to the ‘Tourism Promotion Act’ would have imposed additional regulations regarding development and transaction, a new business model was devised to circumvent these requirements.

Family hotels and timeshares were primarily located in resort areas and targeted family tourists for leisure purposes. In contrast, there was insufficient supply of lodging establishments in urban areas for consumers needing long-term stays for business purposes. Thus, the market environment justified the emergence of urban long-term stay lodging establishments. Consequently, officetels with similar facilities and abundant supply began to be used for lodging business, but without specific regulation. This led to prolonged disputes, with the hotel industry pushing back, culminating in the designation of ‘residential lodging’ as a distinct category in 2012 under the ‘Public Health Control Act’ and the establishment of detailed regulations.

The ‘Enforcement Regulation of Public Health Control Act’ Appendix 1 stipulates the following facility standards for residential lodging establishments:

  1. Residential lodging establishments must have cooking facilities and ventilation facilities or windows. If cooking facilities are installed indoors, fixed cooking facilities must be installed in each room or in a communal cooking area.
  2. Residential lodging establishments must have a bathroom or shower room in each room.

Following the ‘Public Health Control Act,’ the Ministry of Land, Infrastructure, and Transport included ‘residential lodging properties’ in the ‘Enforcement Decree of Building Act’ Appendix 1 in 2013 and implemented the ‘Residential Lodging Property Building Standards’ in 2021 to specify detailed standards for the facilities. Article 3 of the ‘Residential Lodging Property Building Standards’ stipulates the following:

  1. Conformity with the Residential Lodging Property Standards specified in Appendix 1 of the ‘Enforcement Regulation of Public Health Control Act.’
  2. Installation of a front desk and lobby (including public restrooms).
  3. Installation of at least one linen room (for storing bedding, sheets, towels, etc.) per 30 rooms.
  4. Installation of food and beverage facilities (e.g., restaurants) for tourists.
  5. Introduction of a room management (control) system capable of checking room access control and security, to be included in the design documents.
  6. If balconies are installed in each section, they must be installed in an open form exposed to the outside air, and if balconies are installed, safety facilities to prevent falls must be installed according to Article 17, Paragraph 4 of the ‘Regulations on the Standards for Fire and Fire Protection Structures of Buildings.’

Residential lodging properties, rooted in officetels, adopted the officetel practice of separating and selling fractional ownership. This was a prevailing business model for real estate developers at the time. From the beginning, residential lodging properties were positioned as ‘fractional ownership hotels,’ but without the stable operation structure similar to US condo hotels, leading to inherent problems from the outset.

Residential lodging is a type of lodging establishment with cooking facilities, similar to family hotels and timeshares under the ‘Tourism Promotion Act.’ As such, family hotels, timeshares, and residential lodgings may be in direct competition.

The differences are that residential lodgings can be sold fractional pursuant to the ‘Act on the Sale of Building Units,” and timeshares can be as well pursuant to Article 24 of the ‘Enforcement Decree of Tourism Promotion Act,’ whereas family hotels cannot be sold fractional. Additionally, family hotels and timeshares can recruit members according to Article 24 of the Enforcement Decree of Tourism Promotion Act, while residential lodgings cannot. Thus, residential lodgings could more easily secure development funds through unit sales, but it faces higher difficulty in securing operational funds and maintaining quality.

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Data Source

  • GDP: GDP, Current $US (World Bank Open Data)
  • Establishments: Compendium of Tourism Statistics (UNWTO), Lodging Business Ledger (MOIS)
  • Rooms: Compendium of Tourism Statistics (UNWTO), Lodging Business Ledger (MOIS)
  • Lodging GDP: Value Added by Industry (BEA), National Accounts (Cabinet Office), GDP of Indonesia (BPS), GDP & GNI by Sector (BOK), Economic Census (KOSIS)
  • Period: 2017-2021

※ In Korea, general & residential accommodations are included while rural & urban minbaks are excluded. Comparable countries are selected based upon availability of lodging GDP statistics for all types of accommodations.

Data Source

  • Population: Population, Total (World Bank Open Data)
  • GDP: GDP, Current $US (World Bank Open Data)
  • Rooms: Compendium of Tourism Statistics (UNWTO), Lodging Business Ledger (MOIS)
  • Lodging GDP: Value Added by Industry (BEA), National Accounts (Cabinet Office), GDP of Indonesia (BPS), GDP & GNI by Sector (BOK), Economic Census (KOSIS)
  • Period: 2017-2021

※ In Korea, general & residential accommodations are included while rural & urban minbaks are excluded. Comparable countries are selected based upon availability of lodging GDP statistics for all types of accommodations.

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Data Source

  • Korea: Lodging Business Ledger (MOIS), Tourist Accommodation Ledger (MCST)
  • USA: Census Database (STR)
  • Period: As at the end of 2021

※ General & residential accommodations other than rural and urban minbaks asre included for Korea. Life cycle was calculated as of December 31, 2021 or actual closure date. If there exists a discrepancy between data sources for an establishment, the discrepancy was settled through an algorithm before use.

Data Source

  • Korea: Lodging Business Ledger (MOIS), Tourist Accommodation Ledger (MCST), Economic Census (KOSIS), Hotel Operating Statistics (KHA), DART (FSS), Trends Report (STR)
  • USA: Compendium of Tourism Statistics (UNWTO), Census Database (STR), Trends Report (STR)
  • Period: 2005-2021

※ General & residential accommodations other than rural and urban minbaks asre included for Korea. Visibility was calculated as the number of establishments for which revenue data is available divided by the total number of establishments. If there exists a discrepancy between data sources for an establishment, the discrepancy was settled through an algorithm before use.

Data Source

  • Guests(Korea): Domestic Traveler Survey (MCST), International Traveler Survey (MCST), Hotel Operating Statistics (KHA)
  • Rooms(Korea): Lodging Business Ledger (MOIS), Tourist Accommodation Ledger (MCST)
  • Guests(USA): Compendium of Tourism Statistics (UNWTO), Trends Report (STR)
  • Rooms(USA): Compendium of Tourism Statistics (UNWTO), Census Database (STR)
  • Period: 2005-2020

※ General & residential accommodations other than rural and urban minbaks asre included for Korea. If there exists a discrepancy between data sources for an establishment, the discrepancy was settled through an algorithm before use.