Seoul is facing a severe hotel room shortage as foreign visitor numbers surge to record highs, fnnews.com reported. City officials and industry analysts warn that a six-year stagnation in new hotel construction, combined with delayed regulatory reforms from the government and national assembly, risks derailing South Korea’s tourism momentum.
Global real estate consultancy CBRE reported that the total number of hotel and tourist hotel rooms in Seoul grew at an annual average of just 0.1% between 2019 and 2025. Room counts in the city inched from 67,505 at the end of 2019 to 68,020 by the end of 2025, adding a mere 515 rooms over six years.
Surging Visitor Numbers Meet Static Room Supply
Foreign tourist arrivals in Seoul have rebounded sharply following pandemic-era lows. Data from the Seoul Metropolitan Government shows that annual visitors climbed from 560,000 in 2021 to 8.86 million in 2023, 12.83 million in 2024, and 14.54 million in 2025.
Between January and September, 13.14 million foreign tourists visited Seoul, representing a 21.5% jump over the 10.82 million arrivals recorded during the same period in the previous year.
Cushman & Wakefield analyzed that Seoul’s hotel room occupancy rate reached 79.2% last year, marking its highest level since 2017. Industry operators consider an 80% annual occupancy rate to be effectively full capacity. Factoring in rooms held vacant for routine maintenance and cleaning, this utilization rate signals that weekend and peak-season bookings are virtually unavailable, while weekday stays face acute shortages.
CBRE noted that while hotel supply grew at an annual average of 8.5% between 2010 and 2019, new development stalled following the pandemic due to widespread closures and building conversions.
Seoul Submits Targeted Regulatory Reform Requests
To ease the squeeze, the Seoul Metropolitan Government submitted targeted regulatory reform requests to national authorities. In December of last year, the city asked the central government to permit domestic guests to use foreigner-only urban minsu-up properties. The proposal aims to expand the current Tourism Promotion Act restrictions to include local travelers and rename the category to urban minsu-up.
The city also requested looser architectural regulations for small tourist hotels by reducing mandatory boundary setbacks and relaxing green space requirements—which currently mandate that 15% or more of a plot be designated for landscaping—to encourage downtown accommodations.
Despite these appeals, legislative progress remains deadlocked. Following the city’s proposals, the 11th National Tourism Strategy Meeting in February announced plans to institutionalize domestic shared lodging, but reforms have stalled. A Seoul city official stated that implementation requires parliamentary legislation and the city is awaiting a formal response from the central government.
The Ministry of Culture, Sports and Tourism is currently negotiating a revision to the Tourism Promotion Act with lawmakers to legalize domestic access to urban minsu-up rentals. However, a ministry official acknowledged that the timing of any amendment is difficult to predict because the final decision rests with the National Assembly.
Meanwhile, proposed landscaping exemptions for small tourist hotels remain under review. A ministry official explained that while the adjustment is feasible via an enforcement decree under the Tourism Promotion Act, it requires inter-ministerial coordination with the Ministry of Land, Infrastructure and Transport, and a final decision has not yet been reached.
Frequently Asked Questions About Seoul’s Accommodation Crisis
How many new hotel rooms were built in Seoul over the six-year period?
According to CBRE data, Seoul added just 515 hotel rooms between the end of 2019 and the end of 2025, representing a total increase of 0.8%.
What specific changes is Seoul seeking for urban minsu-up accommodations?
The city requested that the central government amend the Tourism Promotion Act to allow domestic tourists to use properties currently restricted exclusively to foreign visitors, while also updating the category name.
Worth a look