{"id":20577,"date":"2024-06-17T14:00:51","date_gmt":"2024-06-17T05:00:51","guid":{"rendered":"https:\/\/lobin.co\/article\/lodging-market-korea-2022\/"},"modified":"2024-06-17T14:00:51","modified_gmt":"2024-06-17T05:00:51","slug":"lodging-market-korea-2022","status":"publish","type":"article","link":"https:\/\/lobin.co\/en\/insight\/article\/lodging-market-korea-2022\/","title":{"rendered":"Lodging Market Korea 2005-2022"},"content":{"rendered":"\t\t
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1. Understanding Lodging Business<\/h6>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\u2460 Definition of Lodging Business<\/strong><\/span><\/p>

The term ‘lodging business’ is used with various implications in Korea. It sometimes means lodging business<\/a> implicating an activity of supplying lodging products to the market, sometimes means lodging enterprise<\/a> implicating the subject of such activities, and sometimes means lodging industry<\/a> implicating the entire set of them. This ambiguity often causes misinterpretation of relevant regulations and statistics, which may eventually grow to larger problems that cannot be resolved straightforwardly.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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\u2461 Elements of Lodging Business<\/strong><\/span><\/p>

Lodging business<\/a> means an activity of providing a place together with services on a daily basis for people to stay temporarily away from home. In other words, its starting points are a lodging property in a broad sense<\/a> and a lodging enterprise<\/a> producing and providing services out of it. A lodging property in a broad sense<\/a> means any property used for a lodging business, while a lodging business in a narrow sense<\/a> is a property permitted only for lodging business pursuant to the Building Act. For example, a single-family house<\/a> used as a rural minbak<\/a> is not a lodging property in a narrow sense<\/a> but a lodging property in a broad sense<\/a>.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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\u2462 Split between Ownership and Operations<\/strong><\/span><\/p>

Traditionally, a lodging enterprise<\/a> was the owner of the lodging property<\/a>, and there was not much need to view them separately. However, lodging enterprises<\/a> started to diverge from ownership of lodging properties<\/a>, along with changing competitive environment in the lodging industry<\/a>. The key driver was the need for isolating two different cycles in capital management, working against each other: the owner of a lodging property<\/a> wanted to maximize capital gain on a long-term basis, while the lodging enterprise<\/a> needed to maximize operating profit on a short-term basis.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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2. Interpreting the Report<\/h6>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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\u2460 Definition of Lodging Establishment<\/strong><\/span><\/p>

A lodging establishment<\/a> means a minimum set of assets to produce and distribute lodging products independently, based on a combination of a lodging property<\/a> and a lodging enterprise<\/a>. The concept is built upon the many-to-many relationship between lodging properties<\/a> and lodging enterprises<\/a>, which became prevalent along with split of ownership and operations. For example, the number of lodging establishments<\/a> is equal to the number of lodging enterprises<\/a>, if multiple lodging enterprises<\/a> run lodging businesses<\/a> independently in a lodging property<\/a>. On the other hand, the number of lodging establishments<\/a> is equal to the number of lodging properties<\/a>, if a lodging enterprise<\/a> operates multiple lodging properties<\/a> separately at different locations.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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\u2461 Classification of Supply<\/strong><\/span><\/p>

This report uses the Establishment Types<\/a> as the classification system of supply, which incorporates the classification systems of lodging establishment<\/a> types pursuant to individual regulations, building types of lodging properties<\/a> pursuant to the Building Act, and business types of lodging enterprises<\/a> pursuant to the Business Type Code. As such, the data for lodging establishments<\/a> are classified and compiled into tourist hotels<\/a>, other hotels<\/a>, resort condos<\/a>, general lodgings<\/a>, residential lodgings<\/a>, rural minbaks<\/a>, urban minbaks<\/a> and other lodgings.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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\u2462 Measurement of Supply<\/strong><\/span><\/p>

The number of establishments<\/strong>, the number of rooms<\/strong> and the number of rooms available<\/strong><\/a> are the major indicators of supply volume. The number of rooms available means the total number of room products available for daily sales in a year, calculated as the number of rooms multiplied by the number of operating days in a year. Also, the average number of rooms<\/strong> is the indicator of scale of establishments, calculated as the number of rooms divided by the number of establishments. This report measures trends and status of supply based on the compounded annual growth rate<\/strong> and the fair share<\/strong> of supply indicators for a specified period of time.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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\u2463 Classification of Demand<\/strong><\/span><\/p>

The lodging demand means guests who stay temporarily at lodging establishments away from home. The lodging demand can be broken down by various criteria, but this report breaks it down into domestic<\/strong> and international<\/strong> demands by origin, and into leisure<\/strong> and other<\/strong> demands by purpose. Moreover, they can be further broken down based on consumption patterns: by age group<\/strong> in the case of domestic demand, and by nationality<\/strong> in the case of international demand.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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\u2464 Measurement of Demand<\/strong><\/span><\/p>

The number of guests<\/strong> is the major indicator of demand volume, and the number of rooms occupied<\/strong><\/a> is the major indicator of consumption volume. However, it should be noted that they capture only accommodated demand but not all of potential demand. Also, the occupancy<\/strong><\/a> is the indicator of balance between supply and demand, calculated as the number of rooms occupied divided by the number of rooms available, and the number of guests per occupied room<\/strong> is the indicator of productivity by demand group, calculated as the number of guests divided by the number of rooms occupied. This report measures trends, status and stability of demand based on the market share<\/strong> and the volatility<\/strong> of demand indicators for a specified period of time. In this report, the volatility is calculated as the standard deviation divided by the average<\/strong>.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\n