Guesthouses, hanok stays face suspension for price-posting violations

Foreign tourist guesthouses will be required to post and comply with room-rate schedules under new rules, and both those businesses and hanok experience operators will face a five-day suspension from the first violation if they fail to display rates or charge above posted prices.

The government approved an amendment to the enforcement decree of the Tourism Promotion Act at a Cabinet meeting Tuesday.

The amendment follows up on a price-gouging elimination plan announced at an expanded national tourism strategy meeting in February and takes effect immediately upon promulgation Tuesday.

Foreign tourist guesthouses had previously operated in a regulatory blind spot, with no obligation to post or adhere to a price schedule. Hanok experience operators faced only a corrective order on a first offense for failing to post rates or charging above them, a measure that proved insufficient to ensure voluntary compliance.

The amendment introduces a mandatory rate-posting and compliance requirement for foreign tourist guesthouses and imposes a five-day business suspension from the first violation on both foreign tourist guesthouses and hanok experience operators that fail to display a room-rate schedule or charge more than the posted rate.

Penalties escalate with subsequent violations: a 15-day suspension for a second offense, a one-month suspension for a third, and cancellation of business registration for a fourth.

General lodging businesses have been subject to the same first-offense five-day suspension since July 14, when a revised enforcement rule under the Public Health Control Act took effect.

The government plans to extend price-gouging sanctions to restaurants and the taxi industry through separate amendments to the enforcement rules of the Food Sanitation Act and the Taxi Industry Development Act.

Alongside this, the government intends to pursue follow-up legislation, including the introduction of a voluntary advance rate-reporting system for lodging businesses and new provisions penalizing unilateral reservation cancellations without legitimate cause.

Under the advance rate-reporting system, lodging operators would register seasonal room-rate ceilings with local governments and make them public; those that fail to register or charge above their declared rates would face administrative penalties including business suspension.