Five-star hotels turn to home shopping networks to attract local customers
SEOUL, May 22 (Korea Bizwire) — The hospitality industry, which is on the verge of collapse due to the coronavirus outbreak, is breaking its business framework to survive.
As each hotel strives to offer huge discounts, a five-star luxury hotel in downtown Seoul will also feature rooms with steeply discounted prices on a teleshopping television program.
With the recovery of global travel demand uncertain, the industry is diversifying its sales channels to increase the proportion of Korean customers.
The InterContinental Seoul COEX will sell its rooms at a special price through GS Shop’s home shopping show next Sunday.
This is the first time that a five-star luxury hotel room will be featured on a home shopping network.
The prices and benefits are literally “shocking”. Including taxes and service charges, the price is 129,000 won ($104) on weekdays and 169,000 won on weekends, about a 50% discount.
One Step Ahead, Lotte Hotel’s lifestyle boutique brand, L7, will sell out its rooms on a Friday night special via Lotte Home Shopping.
The industry seems quite surprised by the entry of major hotels into teleshopping.
Although national distance selling networks offered a variety of products ranging from household goods to automobiles and travel packages, they rarely sold hotel products.
The “new normal” under COVID-19 has operated as a matchmaker bringing together hotels and home shopping.
If the hotel industry decided to embark on teleshopping, it is because the Korean clientele quickly imposed itself as a prerequisite for the survival of local hotels.
In general, luxury hotels have carried out goal-oriented business strategies, because the share of profits from foreign companies and various corporate and group events is more than domestic hotel guests.
However, the situation this year has changed rapidly. The biggest source of hotel sales disappeared with COVID-19 classified as a pandemic, cutting inbound flights.
According to a recent report published by the World Tourism Organization (UNWTO), the number of travelers worldwide is expected to drop by 78% if global travel restrictions continue until December.
This is why the industry must compensate for the sales gap by increasing the proportion of domestic customers.
In fact, the Intercontinental Seoul COEX, which this time launched home shopping products, is considered a representative luxury hotel with a higher proportion of foreign business guests than Koreans.
As the coronavirus crisis in Korea has eased, the resumption of domestic travel will play a vital role.
Above all, home shopping is a channel frequently visited by “at home” consumers. It is therefore believed that expanding the market through home shopping will help lower the threshold for luxury hotels and secure a new consumer base.
However, there are concerns that such drastic discounts and channel diversification could be detrimental in the long run.
Due to the conservative nature of the industry, it is not easy to reverse prices once they have fallen.
Some also say that the teleshopping market will not be an advantage considering that maintaining a high-end image is a competitive advantage within the industry.
“There are concerns about price discounts and door-to-door sales, but we decided it would be more effective to build hotel awareness through teleshopping channels familiar to consumers,” an official said. of the Intercontinental Seoul COEX.
DM Park ([email protected])