The Shinsegae Group is set to break into the Jeju Island hotel market, mounting a challenge to Lotte and Shilla.
According to the investment banking (IB) industry on July 15, Shinsegae was recently selected as the operator of Kensington Jeju Hotel located in the Jungmun Tourism Complex in Jeju, Seogwipo City on Jeju Island.
SK D&D, which acquired Kensington Hotel from the Eland Group in February, has asked Shinsegae Chosun Hotel to operate Kensington Hotel Jeju and nearby Evergreen Hotel on its behalf. SK D&D has recently raised 128 billion won to remodel Kensington Hotel.
Eland Jeju Resort, an affiliate of the Eland Group, acquired Seorabeol Hotel in 2010 and opened it as Kensington Jeju Hotel, a five-star hotel. Kensington Jeju Hotel returned to profitability in 2016 but last year, China’s retaliation of Korea for the latter’s deployment of the THAAD System caused a big drop in the hotel’s sales.
In February of this year, the Eland Group sold off the hotel for 117 billion won to B&M Development, a real estate development affiliate of SK D&D.
Shilla and Lotte Hotel have been dominating the five-star hotel market on Jeju Island. But the Shinsegae Group’s management of Kensington Jeju is expected to bring changes to the hotel industry in Jeju.
Recently, a rise in the number of individual Chinese tourists to Jeju Island is fueling demand for five-star luxury hotels not sale-type hotels in the Jeju hotel market.