Shinsegae’s boutique hotel fails to impress
Shinsegae Group Vice Chairman Chung Yong-jin has proven his ability as a business leader – he brought Starbucks to Korea and established the mega-sized Starfield shopping malls in Seoul and the surrounding area.
Last month, the 50-year-old spearheaded the launch of a new cosmetic brand, called Stone Brick, which has won over the hearts and minds of women in their 20s, and foreigners.
But Chung has yet to chalk up tangible results for L’Escape, an expensive boutique hotel in downtown Seoul that opened midway through last year. It might be his rare mistake.
The irony is that its bars and restaurants have gained great popularity, but tourists rarely opt for the hotel’s accommodation.
To dine there on weekends, people have to make reservations a month-and-a-half in advance. But the hotel’s occupancy rate was less than 40 percent last summer compared to 70 percent at a nearby competitor.
The occupancy rate refers to the number of occupied rooms among all rooms available. The higher the better, as it is a significant metric to assess the performance of a hotel.
The disappointing rate might be attributable to high prices – 80 out of 204 rooms at L’Escape are suites, which means accommodation costs are quite high.
Possibly affected by L’Escape, E-Mart – the country’s top discount chain, and a major subsidiary of Shinsegae Group – racked up about a $7 million deficit during the fourth quarter of 2018 in the hotel business.
Despite the struggle of L’Escape, Shinsegae plans to open five hotels over the next five years.
“It remains to be seen how Vice Chairman Chung will bring about a turnaround at L’Escape,” a Seoul analyst said.
Samsung founder’s grandson
Chung is a grandson of Samsung Group founder Lee Byung-chul, and is a cousin of Samsung Vice Chairman Lee Jae-yong, the de facto leader of the country’s leading conglomerate.
Chung was married to famous actress Ko Hyun-jung, but they split in 2003, and he retained full custody of their two children. Chung later remarried to a flutist with whom he has had twins.
He is famous as an early adopter of new technologies. Chung is known as the first Korean to own a Tesla automobile and was also a proactive user of social networking services such as Facebook.