The Korean government on Wednesday convened a task force meeting on eliminating regional price gouging and unveiled detailed countermeasures, ahead of the BTS Busan concerts scheduled for June 12-13.
The meeting was co-chaired by Kang Ki-ryong, Vice Minister for Economic Policy at the Ministry of Economy and Finance, and Kang Jung-won, Director General for Tourism Policy at the Ministry of Culture, Sports and Tourism. Officials from the Ministry of Health and Welfare, the Ministry of the Interior and Safety, the Ministry of Agriculture, Food and Rural Affairs, the Ministry of Land, Infrastructure and Transport, the Ministry of SMEs and Startups, the Fair Trade Commission, the Ministry of Food and Drug Safety, the National Tax Service, the Korean National Police Agency and the Busan Metropolitan Government also attended.
President Lee Jae-myung has repeatedly called for eradicating price gouging in the tourism market, turning Busan into a test case for the anti-gouging drive ahead of the BTS concerts on June 12-13. The crackdown is focused primarily on lodging.
The government plans to secure as many reasonably priced alternative lodgings as possible through cooperation among central and local governments and the private sector, in order to minimize the lodging burden on tourists. Universities, religious facilities, public institution training centers and youth training facilities in Busan and nearby areas, including Yangsan and Changwon, will participate in providing paid or free accommodations to domestic and international tourists. About 1,300 alternative lodgings have been secured as of May 28, with reservations either completed or being processed sequentially, and additional facilities will continue to be secured. Available alternative lodgings and reservation methods will be announced through "Visit Busan" and the Korea Tourism Organization's "Visit Korea" website.
The Busan Metropolitan Government plans to continue encouraging voluntary participation in normal-price lodging services through initiatives such as the "Fair Lodging Challenge," and will work to expand tourists' options by reviewing the use of homestays offered by foreign residents in the city. The government will also promptly review and soon announce transportation measures, including additional night trains to areas near Busan and additional late-night buses between Busan and Seoul.
The Ministry of Culture, Sports and Tourism has requested cooperation on fair price management at lodgings near concert venues through meetings with lodging-related associations. The Ministry of the Interior and Safety, in cooperation with related ministries, will actively promote a price-gouging eradication campaign jointly with private organizations such as the Korea Lodging Industry Central Association.
On May 29 and June 8-9, joint special on-site inspections involving the National Tax Service and the Fair Trade Commission will intensively review the operating conditions, sanitary conditions, and possible price collusion among lodgings near concert venues. If violations are detected, immediate sanctions, including corrective orders and business suspensions, will be imposed under relevant laws.
The Busan Metropolitan Government will also push ahead with a special planned investigation of the lodging industry through June 15, focused on transportation hubs such as Busan Station and Seomyeon, as well as concert venues and tourist sites. Violations such as unregistered lodging operations, breaches of the obligation to post and abide by lodging rates, and breaches of sanitary standards will be met with stern measures, including criminal indictment and administrative actions.
When complaints such as unilateral reservation cancellations are received through the area code 120 or the tourism complaint center 1330, the list of reported businesses will be immediately forwarded to local governments such as the Busan Metropolitan Government for inspection and other measures. Local governments will in turn forward the list to the National Tax Service so that suspicions of tax evasion can be investigated, strengthening the cooperation framework. For lodgings where consumer harm from price gouging is confirmed, penalties will also be expanded, including raising the deduction weight in evaluation items for hotel grade determination.
The Fair Trade Commission, in cooperation with the Korea Consumer Agency and the Busan Consumer Organizations Council, plans to issue a "Consumer Damage Prevention Advisory" on May 29 to disseminate major damage cases and consumer action guidelines, in order to prevent consumer harm from unfair contract cancellations or unilateral demands for additional fees by lodgings.
Surveillance of unfair practices by lodging businesses, including prohibited business association acts and collusion, will be strengthened, and any confirmed violations will be sternly sanctioned. To encourage active reporting, the existing reward limit of 100 million to 3 billion won will be abolished, allowing reporters to receive up to 10 percent of the imposed fine as a reward. Procedures to revise the related regulations will be completed within June.
Efforts to create a reasonable price-formation environment and enhance price transparency will also continue in pursuit of a fundamental solution to price gouging. In February, the government announced its "Measures to Eradicate Price Gouging," which included a "Price Gouging Safety Price System" (voluntary rate pre-reporting system) requiring lodgings to autonomously set seasonal rate ceilings in advance and report and disclose them; stronger sanctions for failure to display prices, false price displays and failure to abide by displayed rates; and new sanction provisions for unilateral reservation cancellations and new consumer damage compensation standards (consumer dispute resolution standards). Related ministries plan to swiftly implement procedures to revise relevant laws, with the goal of completing legislation within the year.
President Lee has been emphasizing his commitment to eradicating price gouging on a near-daily basis. At a briefing on preparations for the UNESCO World Heritage Committee meeting, held at BEXCO in Busan on May 27, the president said, "Busan's image is being significantly damaged due to the so-called 'lodging price gouging' related to the BTS concerts this time, and improvements need to be made."
At the time, the president also offered specific examples, saying, "People are not angry simply because prices are high. That can be a market principle. But people get angry when they make a reservation for 100,000 won, the business cancels it for some odd reason, and then sells it elsewhere for 1 million won."
