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[Yanolja Research Insights] Vol.6 Trends and Challenges in the Serviced Residence Market

The serviced residence (SR) market is evolving rapidly, driven by new consumer behaviors and stricter regulations. Here's a quick look at the key trends and challenges shaping this industry.


What Are Serviced Residences (SRs)?

Serviced Residences (SRs) combine features of both hotels and apartment-style living, offering facilities such as cooking and laundry. This makes them ideal for long-term stays. The demand for SRs has surged, driven by trends like remote work, digital nomadism, and longer stays post-pandemic.


Key Insights: SR Market Overview

  • 86,000 Rooms Nationwide: As of 2021, there were approximately 86,000 SR rooms across South Korea, reflecting significant growth.

  • Surge in Busan: Busan's SR market, especially in tourist-centric areas like Haeundae, has seen rapid growth, with high-end SRs offering premium services and ocean views.

  • Premium SR Growth: High-end SRs are expanding, attracting tourists and business travelers alike who seek longer stays with the comforts of home.


Can SRs Be Converted into Residential Spaces?

The government has pushed for converting SRs into residential officetels to address legal concerns. However, the process faces hurdles like zoning issues and regulatory restrictions. Despite a temporary grace period, the actual conversion rate has been slow.


What Lies Ahead for the SR Market?

  • Tourism Growth: SRs are poised to play a larger role in South Korea’s growing tourism sector, with increased demand expected.

  • Expansion of Premium Options: Premium SRs with luxury services are set to continue expanding, catering to high-demand tourists.

  • Conversion Challenges: The debate over converting SRs into residential facilities is likely to persist, with regulatory shifts still in progress.

What’s next for SRs? Will they remain as lodging facilities, or will they shift to residential spaces? The regulatory challenges and evolving market trends could shape the future in unexpected ways. Want to learn more? Dive into the full report for deeper insights.

Yanolja Research Insights Vol.6

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Location: Seoul, Korea

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