Luxury hotels roll out red carpet to budgeters

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Luxury hotels roll out red carpet to budgeters


1. GS25 at the Seoul Intercontinental Hotel in Samseong-dong, Gangnam, is the first convenience store in a five-star hotel. 2. The food truck “What the Truck” is installed in front of the JW Marriott Dongdaemun Square Seoul and sells desserts and beverages made by the hotel chef. 3. Shilla Stay’s buffet restaurant Cafe has lunch menus whose prices range from 10,000 won to 20,000 won on weekdays. [JOONGANG ILBO]

With the Improper Solicitation and Graft Act, also known as the Kim Young-ran Law, in effect, hotels are seeking ways to draw in price-conscious customers instead of maintaining their luxurious image.

The Grand Intercontinental Hotel in Samseong-dong, Gangnam, southern Seoul, opened a premium version of the convenience store, GS25 in the connecting corridor to COEX Mall. This is the first time a convenience retailer has set foot in a five-star hotel. In the past, hotel lobbies were rented mainly to high-profile, luxury brands that would demonstrate its class.

“We noticed that many “staycationers” - people who vacation or holiday in their home country - bought food or drinks from outside the hotel instead of using room service or the mini bar,” said a spokesman for Intercontinental Hotel.

The newly established GS25 is designed in a different way from other stores with wooden walls and also has a slightly different array of products such as sparkling wine, imported beer and character items prepared for Chinese tourists.

The Conrad Hotel in Yeouido, western Seoul, built a downsized cafe “10G” in the corner of its hotel lounge in March. Normally used as a venue for business meetings, hotel cafes were perceived as high-profile and expensive; it being part of the luxury hotel package. 10G, on the other hand, isn’t much different in terms of price compared to other coffee franchises: Sandwiches made by the chef are 7,000 won ($6.31) and the Americano is 4,500 won.

The cafe is already attracting office workers nearby, “Our goal was to provide a resting place for people who wish to enjoy small moments of luxury in life, by providing them products and services of hotel quality at a reduced price,” said a spokesman for Conrad Seoul.

In August, JW Marriott Dongdaemun Square Seoul launched a pop-up cafe, “What the Truck,” which sells desserts and beverages made by the hotel chef in a food truck. Prices are cheaper compared to the restaurants inside the hotel; the mojito is priced at 6,000 won and coffee at 4,000 won.

“The intention was to create a lighter image and send a message to people that hotels can be visited casually without worrying about the paycheck,” said a hotel spokesman, “the tactic seems to be working because there are more people stopping by the hotel in curiosity of the truck.”

Business hotels, whose prices were already cheaper than the hotels mentioned above, are also lowering prices to satisfy customers who prioritize performance per price. Their main strategy is hotel buffets, which originally ranged from 50,000 won to as high as 100,000 won per person.

The lunch buffet of the restaurant “Cafe” at Hotel Shilla’s business brand, Shilla Stay, is less than 20,000 won. This is even cheaper than lunch buffets in family restaurant brands.

Prices vary by branch. For example, the lunch buffet of Cafe at Seodaemun branch is 15,000 won per person whereas the same menu at the Gwanghwamun branch is 20,000 won. “Every branch is operated differently in terms of price and menus according to the needs of customers that visit each store,” said a spokesman at Shilla Stay.

Reservation rates at eight of Cafe’s nine branches operated nationwide reached 90 percent for weekday lunches. The Mapo and Gwanghwamun branches, both frequented by office workers nearby, expanded their buffets to dinner as well.

The recently opened Courtyard Marriott in Namdaemun also fixed its lunch buffet at 39,000 won.

Another driving force to lower the prices of hotel restaurants was the rise in Chinese visitors. As the competition among budget hotels got fierce, they turned their eyes to improving the breakfast and dinner buffet services.

“Although Chinese tourists are big spenders when it comes to shopping, they have a tendency to budget tightly on lodging expenses,” said a spokesman working for the hotel industry. “As business hotels already have an advantage in terms of low costs, price cuts in buffets might create a synergy to attract more Chinese tourists.”

The aim is to draw in demand that used to exist for premium hotels or high-class Korean restaurants before the Kim Young-ran Act.

“Marketing competition among hotels in Seoul has been recently heating up due to the rise in supply,” said professor Oh Se-jo at Yonsei University School of Business. “For the time being, the trend for reasonable consumption and the newly implemented Kim Young-ran Act are expected to push their efforts toward downsizing,” he added.

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