Era of 10 mln int`l visitors sparks `lodging revolution` in Korea

Cha Tae-shik, a retiree from a construction company, 67, had two extra bedrooms in his Seoul home in Apgujeong-dong after his grown children moved out. He started a homestay service by putting up information on himself and the rooms on homestay websites, and has an average 10 days of occupancy of the rooms per month.

“I enjoy having visitors from other countries including the U.S., Spain and Southeast Asian countries,” he said, adding he earns 1 million to 1.5 million won (890 to 1,340 U.S. dollars) per month from his homestay business.

With 10 million tourists from abroad visiting Korea each year, the domestic hotel industry is rapidly changing. As the number of travelers coming to Korea exceeds that of hotel rooms thanks to the popularity of Korean music and dramas, new forms of accommodation such as “urban homestay” and "house rent" have been introduced at a fast pace.

A variety of people have shown interest in the alternative accommodation business, including older couples whose children have left home and younger workers who want extra income. The number of agencies that arrange homestays also has increased.

○ Opening the door to foreign tourists

A 54-year-old woman in Busan is taking room reservations from foreigners set to visit Korea’s largest port city for the Busan International Film Festival next month. An ordinary housewife, she began offering two bedrooms for homestay because her two children live abroad and her home is too big for her and her husband. “We charge about 50,000 to 60,000 won (45 to 54 dollars) per night, including breakfast. We also serve dinner if requested. Providing stable accommodation and environment for visitors from overseas is rewarding work,” she said.

The homestay business for foreigners, which had been privately run, has been legally recognized this year thanks to a related law that took effect in tourist cities. Anyone can start a homestay business for foreign tourists legally by applying with a government office.

Of all homestay families registered with the Korea Tourist Service, 332 were designated "good homestays" as of last month. Homestay is more popular among fans of Korean music and dramas than other types of tourists.

“Those who choose homestay are mostly those who want to experience everyday life in Korea like a father and his high school daughter who was a big fan of the Korean Wave whom we had as guests,” said a homestay host.

○ Niche business with minimal investment

As more foreigners are turning to alternative types of accommodation in Korea, more Koreans are jumping into the growing sector. Shin Seung-hyeon, a 26-year-old freelance translator, began short-term rental of his studios for foreign tourists to raise extra income. He rented studios near tourist areas such as Itaewon, Hongik University and Dongdaemun in Seoul at low prices, and through homestay agencies, he rents those studios to foreign guests.

“Only half-month occupancy is enough to cover all other expenses including rent and utilities and even to raise small revenue. I think it’s a good business for young people to start because seed money is almost unnecessary compared to other types of accommodation businesses,” Shin said.

Jo Min-seong, who runs the homestay agency BnB Hero, said, “I set up this business utilizing my hosting experience. I started this business in May but I now have almost 800 rooms registered with us. When I first started, the idea was to share rooms. But as demand is too big to be met with a traditional homestay service, studios and empty homes have created another business.”

○ Korean gov`t backs alternative accommodation sector

Lack of adequate accommodation is called one of the biggest problems in Korea’s tourist industry. To tackle this problem, the Korean government is actively nurturing the alternative accommodation sector.

The Korean Tourist Service said, “The number of foreign tourists increases an average of 10 percent per year while that of rooms rises below 3 percent. There’s no way to meet the demand.”

Nam Chan-woo, an officer at the Culture, Sports and Tourism Ministry, said, “The increase in the types of alternative accommodation is a positive change because this way, we can provide more options for foreign visitors to choose accommodation fitting their purposes. The ministry is working on how to encourage privately held homestay businesses to legally register."

teller@donga.com