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[Yanolja Research Q2 2025 Quarterly Trends in the Korea Lodging Industry] Luxury Hotels Down, Motels on the Rise?

Luxury Slips, Budget Stays Bounce Back


According to Yanolja Research’s Q2 2025 Korea Lodging Industry Report, the domestic lodging market demonstrated a pronounced polarization.


While the luxury segment recorded sharp declines, budget-friendly accommodations maintained resilience and even expanded their presence.


So, what’s behind this contrast? Let’s take a closer look.



Sharp Declines in Luxury Hotels and Resorts

The luxury sector experienced significant contraction.


In Q2 2025, five-star hotels reported a 23% decline in RevPAR (Revenue per Available Room) compared with Q2 2024, while resorts recorded a 19% drop.


This downturn reflects two key dynamics: prolonged economic stagnation that has weakened consumer sentiment, and the resurgence of outbound travel, which has redirected demand away from domestic luxury accommodations.


In other words, consumers who had previously spent on high-end domestic stays have shifted their spending overseas.



Value Strikes Back: Motels and Pensions Endure

In contrast, budget-friendly accommodations showed positive growth.

In Q2 2025, Motels recorded a 0.8% increase in RevPAR, and pensions achieved a 2.5% rise compared with Q2 2024. 


These results highlight the ongoing popularity of value-for-money options, even under uncertain economic conditions.



Signs of a Rebound? The Impact of the Off-Season’s End

Despite year-on-year declines, luxury accommodations showed notable quarter-on-quarter improvements.

In Q2 2025, Five-star hotels, in particular, recorded RevPAR surge by 48.9% compared to Q1 2025, driven by stronger spring travel demand.


Although the segment remains weaker relative to last year, this sequential recovery suggests the potential for a rebound. 



Signs of a Rebound? The Impact of the Off-Season’s End Outlook for Q3 2025: Sustained Recovery or Temporary Bounce?

Looking ahead, the report projects upward momentum in both ADR (Average Daily Rate) and OCC (Occupancy Rate) during Q3, the summer peak season.


These indicators raise expectations for performance improvement. However, whether this trend evolves into a sustained recovery—or proves to be a short-lived rebound—remains to be seen.



👉 For deeper insights, check out the full paper below. 



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Location: Seoul, South Korea

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