Skip the $4 coffee, splurge on afternoon tea? Hotels cash in on 'small luxury' trend

Even as budget coffee chains thrive amid high inflation, hotel afternoon tea sets priced above 100,000 won ($66) are carving out a growing presence. The trend is driven largely by consumers in their 20s and 30s who prioritize "experience spending" — a willingness to pay a premium for memorable moments.

Afternoon tea is a hotel lounge service where guests enjoy desserts alongside tea or coffee. It costs considerably less than a hotel room or a full dining experience, making it an accessible entry point into the hotel lifestyle. The craze is equally visible on social media: related posts on Instagram have surpassed 269,000.

Sales figures at major hotels reflect the surge. June afternoon tea set sales at Josun Palace's "1914 Lounge & Bar" jumped 130 percent year on year. Over the same period, set sales at Lotte Hotel Seoul's "Peninsula Lounge & Bar" rose 60 percent, while those at Signiel Seoul's "The Lounge" climbed more than 50 percent. Seoul Shilla Hotel has also seen a steady increase in afternoon tea reservation inquiries.

Afternoon tea is typically priced between 100,000 won and 170,000 won for two. Signiel Seoul charges 170,000 won, Josun Palace's "1914 Lounge & Bar" 120,000 won, and Lotte Hotel Seoul's "Peninsula Lounge & Bar" 110,000 won.

Hotels are sharpening their competitive edge with limited seasonal menus and brand collaborations. Lotte Hotel World has teamed up with Sanrio character Cinnamoroll for the summer. Josun Hotel unveiled an afternoon tea created in partnership with French pastry chef François Perret. Seoul Shilla Hotel runs a "Royal Tea" pairing afternoon tea with champagne or sparkling wine, and this summer launched a mango-themed edition called "Golden Glow Royal Tea."

"As taste-driven, self-gratifying consumption spreads, the 'small luxury' trend continues — people cut back on everyday spending but spare no expense on special experiences," an industry official said. "For first-time hotel visitors, afternoon tea serves as an entry-level introduction to the hotel experience, and that draws in new customers.".