South Korea will impose immediate business suspensions on accommodation and food service providers who cancel reservations without valid reasons or charge excessive prices during large-scale events, according to an announcement made Monday. The measures, part of an “anti price-gouging plan,” aim to curb exploitative practices seen during events like concerts.
New Regulations to Combat Price Gouging
Deputy Prime Minister and Minister of Economy and Finance Koo Yun Cheol announced the policy at the expanded National Tourism Strategy Meeting presided over by President Lee Jae Myung. The policy follows reports of accommodation prices surging up to 7.5 times their normal rates following the announcement of a BTS concert in Busan, with some businesses canceling existing bookings to resell rooms at inflated prices.
The government plans to revise the Public Health Control Act and related laws this year to mandate a five-day business suspension for accommodations canceled for price increases or resale. Repeated violations will lead to 10-day suspensions for a second offense and 20-day suspensions for a third, culminating in a business closure order for a fourth violation. Previously, unilateral cancellations without justification carried no sanctions.
Restaurants and lodging businesses that fail to display prices or deviate from posted rates will also face immediate five-day suspensions, escalating to 10 and 20 days for subsequent offenses. Currently, first offenses typically result in a warning or corrective order. These sanctions will extend to foreigner-only accommodations like Airbnb listings, as well as rural guesthouses and hanok experience accommodations, which previously lacked pricing regulations.
Companies will be required to establish and annually report maximum lodging rates to promote price transparency, though the government will not directly intervene in price setting.
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