Seoul, South Korea – The South Korean government is enacting stricter regulations to prevent price gouging by lodging and restaurant businesses ahead of large-scale events, particularly concerts by internationally renowned groups like BTS. The new measures, announced February 25th by Deputy Prime Minister and Minister of Economy and Finance Koo Yun Cheol, aim to protect consumers from inflated prices and unfair business practices that have recently plagued the tourism sector.
The crackdown comes after reports of significant price increases and reservation cancellations following the announcement of a BTS concert in Busan. Accommodation prices in the area reportedly surged by as much as 7.5 times their normal rates, and some businesses were accused of canceling existing bookings to resell rooms at a premium. This prompted widespread criticism and calls for government intervention to ensure fair pricing for fans and other travelers.
Under the revised regulations, accommodation providers who cancel reservations without valid reasons before major events, such as idol concerts, will face an immediate five-day business suspension. Restaurants and lodging facilities charging prices exceeding those posted will also be subject to immediate suspension. Repeated offenses will result in escalating penalties, including 10-day and 20-day suspensions, and the revocation of business licenses. These rules will apply to all types of accommodations, including foreigner-only guesthouses like those listed on Airbnb, as well as traditional Korean guesthouses and hanok experience accommodations.
The government plans to revise the Public Health Control Act and related laws within the year to formalize these penalties. Currently, first-time offenses typically result in a warning or corrective order, but the new policy will implement suspensions even for initial violations. Businesses will also be required to establish and report maximum lodging rates annually to promote price transparency, though the government will not directly control pricing.
New Regulations Target Unfair Practices
The “anti price-gouging plan,” unveiled at the expanded National Tourism Strategy Meeting presided over by President Lee Jae Myung, represents a significant shift in how South Korea addresses consumer protection in the tourism industry. Previously, there were limited sanctions for unilateral cancellations without legitimate reasons, leaving consumers vulnerable to exploitative practices. The new rules aim to create a more level playing field and ensure that visitors can access affordable accommodation and dining options.
The government’s response reflects growing concerns about the impact of large-scale events on local communities and the potential for businesses to take advantage of increased demand. The BTS concert in Busan served as a catalyst for these changes, highlighting the need for stronger regulations to protect both domestic and international tourists. The measures are intended to foster a more sustainable and equitable tourism environment.
Impact on Tourism and Future Events
These new regulations are expected to have a significant impact on the tourism industry in South Korea, particularly in cities hosting major events. While the government emphasizes that This proves not intervening in price setting, the requirement for businesses to report maximum rates and the threat of suspension for price gouging are likely to encourage more reasonable pricing practices. This could benefit tourists and enhance South Korea’s reputation as a welcoming and affordable destination.
The government’s actions also send a clear message to businesses that exploitative practices will not be tolerated. This is particularly important as South Korea continues to promote itself as a global cultural hub and attract visitors from around the world. The success of these measures will depend on effective enforcement and ongoing monitoring of the tourism sector.
Looking ahead, the government will continue to monitor the situation and assess the effectiveness of the new regulations. Further adjustments may be made as needed to ensure that the tourism industry remains competitive, and sustainable. The implementation of these changes marks a proactive step towards protecting consumers and fostering a fair and transparent tourism environment in South Korea.
What are your thoughts on these new regulations? Share your comments below and let us know how you consider this will impact tourism in South Korea.
