Finance ministry orders business suspensions for first price-gouging offenses

The finance ministry said Tuesday it will order immediate five-day business suspensions for traditional hanok stays and foreigner city guesthouses caught gouging prices. Under revisions to the Enforcement Decree of the Tourism Promotion Act approved at a State Council meeting, operators face the penalty for a first offense involving unposted rates or charges exceeding posted amounts.

The measure takes effect Aug. 4, closing a regulatory gap where hanok operators previously received only correction orders for initial violations. Foreigner city guesthouses, which lacked specific pricing disclosure requirements, will now be subject to the same mandatory suspension penalties.

The government cited summer vacation peaks and large-scale events as drivers for the crackdown, warning that excessive rate hikes and unilateral cancellations damage regional images and tourism competitiveness. Data supporting the move showed accommodation prices in Busan surged up to 7.5 times normal rates during a recent idol concert weekend. Complaints related to global idol performances reached 311 cases by late May, with 64 instances citing excessive fees and 125 involving unilateral cancellations.

The stricter lodging rules build on similar regulations for general accommodations that began July 14. The government indicated that parallel amendments to taxi and food sanitation regulations are undergoing review to extend these penalties to transportation and dining sectors.

Officials also plan to introduce a voluntary cap system requiring hotels to report maximum seasonal rates for public disclosure. Proposed changes to consumer dispute standards would mandate refunds plus compensation equal to 200 percent of the booking cost for cancellations driven by price speculation. The ministry stated it aims to submit legislative bills for the reporting system and cancellation penalties by June 2026.