Tourists and customers at The Shilla Seoul lobby in Jung District, central Seoul, on July 11KIM MIN-YOUNG
Seoul’s hotels are running out of rooms as tourists flood the city’s streets due to the local currency falling in value.
“Our occupancy rate used to go down on weekdays, but now we’re close to full most nights and booking further out than we used to,” said the general manager of a three-star hotel near Myeongdong in central Seoul, who asked that the hotel not be named. “Sometimes guests even upgrade their rooms.”
Average occupancy across the city’s hotels reached about 79 percent last year, according to a report by Cushman & Wakefield, a level that the industry considers effectively full. Hoteliers say that crowds have not let up since.
Korea drew 18.94 million foreign visitors in 2025, a record, according to the Korea Tourism Organization. That is 108 percent of the pre-Covid 19 pandemic figure from 2019 and ahead of the global average recovery of 104 percent.
The reason for the crowding lies in a won that has weakened sharply against the dollar and euro, which has turned what used to be an aspirational trip into a bargain. The local currency slid past 1,500 against the dollar in March, after conflict broke out in the Middle East in late February. For a foreign visitor holding dollars or euros, that means the same room, meal or concert ticket costs less in their own money than it did a year ago.
“Honestly, the won was why we picked Korea over Japan this year,” said Marcus Feld, a visitor from Berlin who was shopping in Myeongdong. “We booked a nicer hotel than we normally would, and we’ve been eating out every night. It just doesn’t feel like a splurge right now.”
Foreign guests accounted for roughly 71 percent of booked rooms, higher than before the pandemic, and revenue per available room, a core measure of hotel profitability, rose about 67 percent from 2019.
The problem, however, is that the number of rooms has stopped keeping up with demand. Seoul’s tourist hotel stock grew from 43,271 rooms in 2016 to 53,564 in 2019, an average annual increase of 7.3 percent. Since the pandemic, growth has nearly stalled, with rooms edging up from 54,190 in 2020 to 56,206 by 2025, a total increase of just 3.7 percent.
Travelers stand at a bank currency exchange counter, where the dollar-won exchange rate is displayed overhead, at Incheon International Airport Terminal 2 on July 2.KIM KYOUNG-ROK
As demand grows far faster than supply, pushing occupancy rates higher, the price of available rooms has climbed as well. Because a hotel takes an average of five years to start operations — from obtaining permits to completing construction — the shortage is expected to persist until at least 2029, even if new hotels are built in the meantime, Kim Tae-hoon, an analyst at Shinhan Investment, predicted.
The squeeze is compounded by what happened during the pandemic, when hotels were converted into offices and homes. Since 2023, new supply has crept in at roughly 1,000 rooms a year, a quarter of the prepandemic pace, the Cushman & Wakefield report found, with scarce land, high financing and construction costs and various permit-related hurdles all standing in the way.
Major operators feel the effects of the crowding directly. Walkerhill in eastern Seoul said that its occupancy rate for the first half of this year stood at about 70 percent, with the share of foreign guests rising to about 35 percent of all stays. Paradise said that its first-half occupancy rose 3 percentage points from a year earlier, while the share of foreign visitors held steady at 53 percent.
Hotels say that the effect shows up not just in bookings but in behavior, with guests staying longer and spending more freely than before.
The growth is also coming from more directions. Arrivals from the United States and Europe reached 142 percent and 120 percent, respectively, of their 2019 levels, according to the Cushman & Wakefield report. The industry sees the spread of demand across markets as a source of stability.
Visitors crowd Myeongdong in Jung District, central Seoul, where spending by inbound tourists hit a record high in April, according to data from the Korea Tourism Organization.YONHAP
But the laggards are Seoul’s two biggest traditional sources. Chinese arrivals have recovered to only about 91 percent of their 2019 level, with China’s share of inbound tourism falling from 35 percent before the pandemic to 29 percent in 2025.
Japan, long a pillar of Korean tourism, is slowing for a reason of its own. The yen has fallen even harder than the won to about 162 against the dollar, its lowest in nearly 40 years, excluding Japanese visitors from the discount that draws everyone else.
“I love Korea. I’ve been here four times,” said Yuki Tanaka from Osaka as she browsed a cosmetics store in Seoul. “But this trip felt expensive in a way that it didn’t before. With the yen like this, I almost stayed home.”
For visitors, the math is already showing up in the price. The market is shifting its focus from filling rooms to charging more for them. As a result, residence-type lodging — comprising the majority of new Seoul openings in early 2026 — has become increasingly popular, with travelers booking quasi-residential rooms rather than ones at traditional hotels.
“I tried to book [a hotel] near Hongdae for a concert during the weekend, and everything decent was gone or double the normal price,” said Priya Nair, a traveler from Singapore. “I ended up in a serviced residence 20 minutes out.”
Experts warn that the tail wind that brought many of these travelers may not last. A weak won is a boon for visitors now, but it is also a symptom of macroeconomic and geopolitical stress, meaning that a stronger currency would ultimately remove part of what is drawing the crowds.
