A growing number of business hotels have opened up in downtown Seoul to meet rising demand for affordable accommodation options among foreign and budget-conscious travelers, industry officials said Friday.

Many of the hotels have sprung up in Myeongdong, a downtown shopping area, and more are set to open later this year to fill a niche demand between five-star hotels and cheap guest houses. So far, about 2,000 rooms have been added to the area. 

Hotel Lotte, a unit under retail giant Lotte Group, has opened two budget hotels, and Hana Tour, the nation's No. 1 tour agency, also opened a hotel in the area last month. 

Marriott International Inc. in May opened a new budget line Courtyard hotel in the nearby area.

More recently, Dongdaemun Market, a traditional market turned fashion mecca, has seen more business hotels joining the race to lure budget travelers. 

The Korean unit of French hotel group Accor opened an Ibis chain with 242 rooms in Dongdaemun, adding to its existing Ibis lineup and other mid-tier hotels in the area.

"The existing Ibis budget hotel alone was not enough to meet rising demands as the number of individual travelers has grown lately," an Ibis official said.

While more hotels mean wider options for travelers, industry officials worry the fierce competition could lead to a price war and further squeeze their margins. 

"As hotels are adding more rooms, the price competition is toughening up," a hotel official said. "Although the downtown capital area is seeing a supply glut, group travelers who come to Korea on cheap package tours are staying in the outskirts of the city." (Yonhap)