[비즈한국] This year, for the first time in history, South Korea enters the '20 Million Inbound Era.' Yanolja Research forecasts that the number of foreign tourists visiting Korea will reach between 20.76 million and 21.26 million by 2026. This is a barrier that had not been crossed for 17 years since the government first set the goal of 'attracting 20 million people annually' in 2009. In the first quarter of this year, the number of inbound tourists already recorded an all-time high, up 23% compared to the same period last year. Guests are overflowing.
However, there is nowhere for these guests to stay. This is the biggest paradox of the current Korean tourism market, and it is a point that real estate investors should pay attention to.
Demand is not a temporary boom but a structural shift
The first point to note is that this demand is not a fleeting phenomenon from the post-COVID recovery period. With the recent cooling of relations between China and Japan, an 'indirect benefit' has been added, as Chinese tourists who were planning trips to Japan are now turning their attention to Korea. This is the background behind Yanolja Research raising its forecast. The government’s vision extends even further. It has set a goal of attracting 30 million foreign tourists by 2030, and the Korea Tourism Organization has pledged to pull this timeline forward by two years.
It is not just the scale that is large; the cash flow is also substantial. According to an analysis by Oxford Economics, the total spending by Airbnb guests in South Korea on accommodation and non-accommodation in 2024 reached 6.3 trillion won. This is not just a tourism statistic, but a cash flow that can be funneled into the vessel known as real estate. It is safe to say that the magnitude and sustainability of this demand have already been verified.
Supply is frozen by law
The problem lies in supply. According to an analysis by Shinhan Securities, as of the end of 2025, there are approximately 42,500 tourist hotel rooms rated 3 stars or higher in Seoul. Even if we make a conservative estimate for foreigners visiting Seoul and assume two people per room, at least 20,000 rooms are needed per day. The deficit grows further when considering the increase in single-person occupancy and domestic demand. The same analysis predicts that this supply shortage will continue at least until 2029 based on licensing trends. Considering the time it takes to build a hotel, this is not a problem that can be solved in the short term.
Even administrative forecasts have missed the mark. The Seoul Metropolitan Government anticipated a surplus of accommodation facilities by 2026, but the Board of Audit and Inspection’s recalculation resulted in the exact opposite: a 'room shortage.' While the hands and feet that should be increasing supply are out of sync, shared accommodation, represented by Airbnb, has been filling the gap.
Barriers to entry clearly exist
We need to be cold-headed here. Airbnb investment is not a market where 'anyone can do it with any property.' Urban home-sharing in Korea stands on a deformed structure where it is legal only for foreigners, while operating for locals is illegal. The system itself, known as the 'Foreign Tourist Urban Homestay Business,' was designed in 2011 to respond to the surge in Chinese group tours, and that 15-year-old design remains in place.
The details of regulations are the details of real estate. Operators must actually reside in the property, vacant houses cannot be registered, and there are requirements for area and the number of rooms. Crucially, officetels near subway stations, which have good locations and low barriers to entry, are fundamentally blocked from operating as shared accommodations. The only legal paths to accommodate both locals and foreigners are to use businesses with government-designated regulatory sandbox exemptions or to meet specific registration requirements such as those for Hanok experience businesses or rural homestays.
In short, barriers to entry are real. However, in the world of investment, a barrier to entry is also a moat that filters out competitors once you successfully cross it.
There is opportunity beyond the barrier
A notable change is that the system has begun to move. In October 2025, the government launched a task force to strengthen the competitiveness of the service industry, which began full-scale discussions on the institutionalization of home-sharing for locals. The Korea Chamber of Commerce and Industry (KCCI) proposed creating a 'Shared Accommodation Business' category under Article 3 of the Tourism Promotion Act, abolishing the distinction between locals and foreigners, mandatory residency requirements, and limits on supply and operating days, and even including officetels that have been excluded so far. The Ministry of Culture, Sports and Tourism, which is the competent authority, is putting weight on institutionalization through legislative bills. The precedent of France amending its housing law in 2017 to legalize shared accommodation is also being used as a reference.
If you translate this trend into the language of real estate, the meaning becomes clear. If the exclusion of officetels and mandatory residency requirements are lifted, urban officetels, serviced residences, and urban-type housing units—which were previously blocked from being used as accommodations—will all be re-evaluated as 'legal lodging assets' at once. The market is already moving. Analysts suggest that converting unsold officetels or urban housing units into tourist hotels could significantly improve profitability per room, and the government has also shifted policy toward significantly relaxing the requirements for converting residential serviced residences into officetels and for registering lodging businesses.
Of course, favorable conditions are always accompanied by friction. The existing lodging industry questions regulatory equity, and nearby residents worry about rising rents and infringements on residential rights, such as noise and waste. If quantitative expansion does not keep pace with qualitative management, there is a possibility that regulations could be tightened again. However, the existence of this friction itself serves as a buffer zone that buys time for prepared investors.
If set up properly, public interest and profit meet
A crucial shift in perspective is needed here. A properly set-up Airbnb investment is not just a pursuit of private gain, but an investment that aligns with national tasks.
With 20 million people flocking in, the accumulation of reputations like 'I will never come back' due to a lack of places to sleep is a painful loss for a country aiming to be a tourism powerhouse. Increasing the supply of legal and safe accommodation is essentially solving this supply shortage and is exactly in line with the direction the government intends to take through institutionalization. In other words, shared accommodation investment operated properly within the legal framework is also a 'public interest investment' that aligns with national policy.
The appeal as an income-generating real estate is also clear. It involves a structurally upward-trending tourism demand, a supply shortage that is difficult to resolve for at least several years, and the momentum of value re-evaluation through institutionalization, all overlapping at the same time. It is rare to find an asset where these three things point in the same direction at once. The expression 'future-oriented' is by no means an exaggeration.
The key lies in doing it 'properly.' The method of operating in the gray areas of illegality while avoiding crackdowns has already reached its expiration date. Selecting locations and properties that meet legal registration requirements, reading the direction of institutionalization to pre-position assets, and precisely designing operations as a business—only those investors who overcome the entry barriers through legitimate means will fully reap the fruits of the coming re-evaluation.
The guests are already coming. The vessels are empty, and the laws are opening up. Now is the time to start Airbnb investment—'properly.'
※ Kim Hak-ryeol, the head of the Smart Tube Real Estate Research Institute, known by his pen name 'Pashong,' served as a team leader at the Korea Gallup Real Estate Research Division. He operates and hosts the Naver blog 'Pashong’s World Exploration' and the YouTube channel 'Stew TV.' He is the author of numerous books including '3040 Real Estate Beginner's First Investment (2026),' 'Rewriting the South Korean Real Estate User Manual (2025),' 'The Power of Gyeonggi Real Estate (2024),' 'The Absolute Principles of Seoul Real Estate (2023),' 'The Future of Incheon Real Estate (2022),' 'Kim Hak-ryeol’s Absolute Principles of Real Estate Investment (2022),' 'South Korean Real Estate Future Map (2021),' and 'From Now On, Only Places That Will Rise Will Rise (2020).'