Jeju KAL Hotel to formally close on April 30

Jeju KAL Hotel, which will formally close on April 30. [KAL HOTEL NETWORK]

Jeju KAL Hotel will formally close on April 30, marking an end to its 48-year history.

The city of Jeju announced Monday it accepted the business closure application submitted by Hanjin Group’s KAL Hotel Network, which operates the hotel, allowing the venue to close on April 30. Jeju KAL Hotel hasn't accepted any bookings since March 31, but hasn’t formally suspended business yet.

The hotel was Jeju Island’s first five-star hotel, opening in 1974.

KAL Hotel Network announced last year it will close due to growing debt amid a slump in tourism during the pandemic. In 2020, it logged revenue of 54.5 billion won ($43.5 million), down 51 percent on year. Net loss grew 97 percent on year to 32.8 billion won, compared to a loss of 16.7 billion won the previous year.

The company will sell the hotel and land to an unnamed real estate asset management company, which will turn the venue into an officetel, a building used for both commercial and residential purposes in Korea. The venue is 12,678 square meters (136,460 square feet) and worth 68.7 billion won.

A total of 117 employees working at the hotel voluntarily resigned, receiving compensation equivalent to their 20-month salary. The remaining 73 employees have been transferred to work at Seogwipo KAL Hotel, another hotel run by KAL Hotel Network on the island.

Known as one of the island’s landmarks and an employer of many Jeju residents, the hotel’s closure was opposed by lawmakers.

Democratic Party lawmakers — including Rep. Oh Young-hun, currently running for Jeju governor, and Rep. Song Jae-ho and Rep. Wi Seong-gon — urged KAL Hotel Network to sell the venue to a hotel company that can continue to operate the hotel, rather than a real estate company.

They released a statement saying “Hanjin Group was able to grow based on Jeju Island's support, by running Jeju KAL Hotel, flights and cargo transportation to the island and other tourism businesses" and that the company "owes a great deal of responsibility to the local community."

Rep. Oh said at a meeting on April 18 that public companies based on Jeju Island could purchase the hotel and operate it. However, the potential plan was not carried out.

BY LEE TAE-HEE [lee.taehee2@joongang.co.kr]