Hanok and City Guesthouses for Foreign Tourists Face 5-Day Suspension for First Overcharge Violation

Amendment to the Enforcement Decree of the Tourism Promotion Act Approved

Immediate Sanctions for Unposted or Excess Charges Start August 4

Application Expanded Beyond General Accommodation; Restaurant and Taxi Penalty Reforms Still Under Review

A view of Oseong Hanok Village in Soyang-myeon, Wanju-gun, Jeonbuk. From the 4th of next month, if hanok experience businesses do not post accommodation fees or charge more than the displayed price, they will face a 5-day business suspension from the first violation. Wanju-gun

Going forward, Hanok experience businesses and urban guesthouses for foreign tourists will face a 5-day business suspension even on the first violation if they fail to post accommodation fees or charge more than the displayed price.

On July 28, the government passed an amendment to the Enforcement Decree of the Tourism Promotion Act containing these provisions at a Cabinet meeting. The amendment will be promulgated and take effect on August 4. The penalties are a 5-day suspension for the first violation, 15 days for the second, 1 month for the third, and business license revocation upon a fourth offense.

The main point of this revision is to close the loopholes in price disclosure regulations. Previously, Hanok experience businesses were required to post and adhere to rate boards, but the first violation only resulted in a correction order. For urban guesthouses for foreign tourists, there was no rule requiring the posting or compliance with room rates. The amendment newly imposes a price-listing obligation on urban guesthouses and raises the penalty for a first violation for both business types to a business suspension.

However, this measure does not mean the government will regulate the accommodation price levels themselves. The direct targets of the restrictions are failure to display price lists or collecting payment in excess of the displayed price. Even if a business sets higher rates for the peak season, as long as these are clearly displayed in advance and strictly followed, the business will not be subject to sanctions under this regulation.

Sanctions against unfairly inflated accommodation fees are being gradually expanded. Since July 14, the revised Enforcement Rule of the Public Health Control Act has applied to general accommodation establishments and residential lodging businesses, imposing a 5-day business suspension for a first violation involving no posted prices or overcharging. With this amendment, Hanok experience businesses and urban guesthouses for foreign tourists will now receive the same initial penalty.

The government also plans to extend these stricter regulations to restaurants and taxis. For restaurants, a 5-day business suspension will be imposed on the first violation if they do not display fee schedules or charge more than the posted amount; for taxi drivers, a 30-day qualification suspension will be issued on the first violation if they collect unfair fares. The related amendments to the Food Sanitation Act and the Taxi Development Act enforcement rules are currently under regulatory and legislative review.

Separately, the government is promoting a so-called "Fair Price Assurance" system, where accommodation providers voluntarily set caps on peak-season and special-event rates and report them in advance to local governments. These declared prices will be made public online and at the front desk, with penalties such as business suspensions imposed for businesses that either do not report prices or charge more than what they declared. Regulations to penalize providers who unilaterally cancel reservations without just cause remain as future legislative tasks.

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