Seoul hotel transaction volume hits USD750m in H1 2026

Thanks to robust interest from domestic investors.

Seoul's hotel market is facing a combination of strong tourism demand and limited new supply, prompting developers to pursue conversions while investors broaden their search for hotel assets, according to JLL.

Actual additions to Seoul's hotel stock remain limited in 2026 because of scarce development sites in central districts, rising construction costs and higher financing expenses. With new ground-up development constrained, JLL said rebranding and conversion of vacant-possession assets are gaining traction as faster routes into the market, citing U5 as an example.

Hotel investment activity has remained strong. Korea's hotel transaction volume reached approximately USD 750 million, or KRW 1.1 trillion, in the first half of 2026, with domestic investors accounting for much of the activity.

However, the supply of assets available for sale in key tourism districts remains limited. JLL said properties including L7 Hongdae and voco Myeongdong remain scarce, prompting investors to consider less traditional hotel locations such as Seonyu Union Hotel.

The outlook is being shaped by both currency and interest-rate trends. JLL expects the weak Korean won to support inbound tourism and visitor spending, particularly among high-spending independent travellers from Europe and the Americas.

At the same time, the Bank of Korea's rate increase from 2.50% to 2.75% is expected to raise financing costs and, alongside elevated construction costs, further constrain future hotel supply.

JLL expects Seoul to enter a period of simultaneous demand expansion and supply constraints. While the imbalance could favour sellers, buyers are likely to face greater competition for limited trophy assets in core districts. Higher financing costs and scarce deal availability could consequently drive further pricing premiums for prime properties.