Government Cracks Down on "BTS Price Gouging"... Lodging Businesses to be Shut Down Immediately If Overcharging Is Detected

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Accomodation prices surge 7.5 times ahead of BTS's Busan concert

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The government is mobilizing strong punitive measures to curb the sharp rise in accommodation prices surrounding BTS's concert in Busan. 

Going forward, any business found engaging in price gouging will be subject to immediate suspension, even for a first offense. A mandatory advance price reporting system will also be introduced for lodging facilities. On the 25th, the Ministry of Economy and Finance announced comprehensive countermeasures against excessive pricing at the National Tourism Strategy Meeting. 

The government defined price gouging to include failing to display prices, excessively raising dates during peak seasons, and unilaterally canceling existing reservations in order to resell rooms at higher prices. 

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Fair trade commission finds rates up to 7.5 times higher than usual

These measures follow recent controversies over excessive charge by some businesses during peak seasons and regional festivals. According to a survey of 135 lodging facilities in Busan conducted by the Korea Fair Trade Commission, weekend room rates during BTS's June concert period rose by as much as 7.5 times compared to normal levels.

Promotional materials of BTS's fifth full-length album comeback were installed on the stairs of the Sejong Center for the Performing Arts in Jongno District, Seoul, and the story was reported by News1 journalist Choi Ji-hwan. 

Deputy Prime Minister and Finance Minister Koo Yun-cheol stated that the actions of some unscrupulous operators harm honest businesses and damage the nation's image. He emphasized that the government would eradicate price gouging to make Korea a country people want to visit again. 

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Introduction of a pre-reporting system for maximum lodging rates and business suspension for violations

To prevent sharp price increase, the government will implement a "Safe Pricing" system. Under this system, lodging businesses must set maximum rates for off-peak, pea, and special event periods and report them to local governments once a year in advance. 

Businesses must display the reported rates on online booking platforms, websites, and front desks. Local governments will also disclose these rates on their websites. Failure to report or charging above reported rates will result in penalties. 

For violations, businesses will face a five-day suspension for the first offense, ten days for the second, and twenty days for the third. A fourth violation may result in permanent closure. The government plans to amend relevant laws within the year of establish legal grounds for these sanctions. 

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Immediate penalties for failing to follow posted prices or canceling reservations unilaterally

Penalties for restaurants and lodging facilities that fail to display prices or comply with posted rates will also be significantly strengthened. Previously, first-time violations resulted only in warnings or corrective orders. Under the new rules, businesses may now face immediate five-day suspensions. 

For second and third offenses, suspension periods will increase. For restaurants, suspensions will rise to three days and five days, respectively. For lodging facilities, they will increase to five days and ten days. 

New rules will require foreign-visitor homestays to display and comply with pricing standards, while rural guesthouses will also be subject to mandatory price compliance. Businesses penalized for price gouging may have their Onnuri Gift Certificate franchise status revoked. Markets with repeat offenders will receive lower scores in government support and festival selection evaluations. 

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Nationwidr joint inspection and expanded rewards for reporting collusion

Local governments that cooperate in price stabilization efforts will receive incentives, including subsidies. Funding for "Good Prize" businesses has increased from 3.1 billion last year to 4.9 billion won this year. 

Laws will also be revised to allow immediate suspension of taxi driver's licenses for unfair for unfair charges on the first offense, with second offenses resulting in suspensions of up to 60 days. 

The government will form joint inspection teams involving the Ministry of the Interior and Safety, local governments, and the National Tax Service ti conduct special on-site inspections. Businesses reported to the Tourism Complaint Center will be shared with local authorities for focused monitoring. 

To encourage public reporting, rewards for whistleblowers who report price collusion will be increase to up to 3 billion won. 

Original article: Wikitree

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