"Promised to Finish by April" but Missed the Timing... "Not Spending a Single Won in Busan" as Korea Faces Possible International Embarrassment

“Immediate Suspension on Violation” Plan

Four Months of Ineffective Regulatory Void

Foreign Visitors Outraged Ahead of BTS Concert

Anti-Price-Gouging Measures Stuck in Red Tape

Lawless Scene on the Ground... Cases of Unilateral

The legislation to strengthen regulations on the lodging industry, a key measure in the government's "eradication of price gouging" plan announced three months ago, has still not been completed. This delay is contributing to a surge in "price gouging" by hotels and other accommodations in the Busan area, ahead of the upcoming BTS concert on June 12–13, an event drawing global attention. As Korea welcomed a record-breaking 4.76 million foreign tourists in the first quarter of this year, concerns are growing that such incidents could damage the country's image in the face of unprecedented tourist inflows.There are growing fears that this could tarnish the national image, especially with the record influx of tourists.

It Was Supposed to Be in April... Legislative Delays Create a 'Regulatory Gap'

Busan Asiad Main Stadium, where BTS held their concert in 2022. They are scheduled to perform at the same venue again this year. Big Hit Music.

According to the government on May 28, the revision of the "Enforcement Regulations of the Public Health Control Act," included in the "eradication of price gouging" plan announced in February, has not yet been processed. An official from the Ministry of Health and Welfare, which oversees the relevant law, said, "The revision is being delayed compared to the original plan," and added, "The regulatory impact review by the Office for Government Policy Coordination is currently underway, and the law will only be implemented next month after a subsequent review by the Ministry of Government Legislation."

Previously, the government had specified April as the deadline for completing the legislative revisions when announcing the measures. The amendments include a strong provision that if a violation of the display or compliance with lodging prices (including price gouging) is detected, the business will face an immediate five-day suspension upon first offense. Notably, new provisions will also be introduced for rural homestays and urban foreigner guesthouses, which were previously only subject to fines or had regulatory blind spots. For these, a five-day business suspension is imposed after the first violation, and after four violations, their business registration will be canceled, effectively removing them from the market.

The Ministry of Health and Welfare attempted to shorten the legislative notice period to enable the revised enforcement regulations to take effect in April, but during discussions with the Ministry of Government Legislation, it was determined that the requirements for shortening the period were not met. As a result, the full 40-day legislative notice period (March 18–April 27) was observed. In some cases, the notice period can be shortened to just one day. Ultimately, due to these administrative delays, the government missed the opportunity to enforce strong regulations just before a globally watched major event.

While Measures Stalled... Busan Scene Marred by Greed and Loopholes

While regulations have stalled due to administrative procedures, on the ground, lodging businesses are engaging in outrageous pricing practices. Some accommodations have raised their rates by as much as ten times the usual price. Exploiting the rule that allows both the business operator and the consumer to cancel a reservation without penalty up to ten days before the stay, some operators are unilaterally canceling normal reservations and then reselling the rooms for over 1 million won during the concert period—a practice known as "rollover sales." As a result, there are even signs of a boycott among foreigners, with some saying, "I won't spend a single won in Busan."

The problem is that there is currently no effective way to stop this. The Busan city government has announced measures such as on-site inspections and providing alternative accommodations, but it does not have the authority to directly adjust lodging prices. With the legislative revision introducing stronger penalties also delayed, it is difficult to rein in self-employed business owners who are focused solely on immediate profits, saying, "If not now, when?" There are also structural limitations in provincial areas, where alternative accommodations and transportation infrastructure are weak, further fueling the price gouging problem.

A government official stated, "For now, the most urgent task is to revise the law. There also needs to be a new guideline imposing punitive damages for malicious unilateral cancellations. In the long term, we should consider public-led supply expansion, such as temporarily opening university dormitories or public training centers to the public, and establishing an alternative accommodation matching system, similar to what is done overseas."

This content was produced with the assistance of AI translation services.