100 Million Won per Night... Soaring Vacation 'Room Rates'

Although Seasonal Business... Prices Surge 2-3 Times Compared to Off-Season
Domestic Travel Surges Instead of Overseas, Leading to Overcharging Confusion
Hotels Also Charge More Than Usual, Including Packages

[Asia Economy Reporter Seungjin Lee] Ahead of the summer vacation season, accommodation prices at major tourist destinations nationwide are soaring more than double. Due to the impact of the novel coronavirus disease (COVID-19), with no options for summer vacations abroad, and summer?which is usually an off-season for weddings?turning into peak season, travelers are flocking to various places across the country. Lodging businesses that had been closed throughout the first half of the year are charging nearly 2 to 3 times higher prices compared to the off-season, and even luxury hotels in Jeju Island are bundling two or more packages and charging higher prices than usual, leading to rampant opportunistic profiteering.

According to the travel industry on the 9th, the weekday price for one night at Villa A located in Goseong, Gangwon Province, during the first week of August is 600,000 KRW. However, the weekday price for one night at the same establishment during the last week of August is 230,000 KRW, showing about a threefold price difference within three weeks. This trend was similar in most regions nationwide. Villa B in Yeosu, Jeollanam-do, had weekend prices starting at a minimum of 1,000,000 KRW in early August, but prices sharply dropped to the 600,000 KRW range from mid-August onward.

Jung Yong-gi (35, pseudonym), who postponed his wedding originally scheduled for this spring to August, said, "When I looked into honeymoon options to Gangwon Province or Namhae, most lodging providers, including major hotels, had nearly doubled their rates within a month. Since we can't travel abroad due to COVID-19, popular villas mostly cost over 1,000,000 KRW per night, so we are even considering postponing our honeymoon."

Demand is especially concentrated on detached pensions and pool villas where social distancing is possible, rather than hotels or resorts where many unspecified guests stay in one building. Although most prices exceed 1,000,000 KRW, it is still difficult to secure a room. Families with young children or elderly parents are more sensitive to COVID-19 infection risks and find themselves forced to accept the inflated prices charged by lodging providers.

A representative of a pool villa business in Sokcho said, "Among pool villas, kid-friendly pool villas equipped with children's play facilities are fully booked until early September," adding, "Rooms are unavailable, so how could the owners not raise prices?"

Most businesses also violated cancellation and refund policies. According to the Consumer Dispute Resolution Standards of the Korea Fair Trade Commission, cancellations made at least seven days before the scheduled use date during peak season weekends should be refunded after deducting 20% of the total fee. However, most providers apply higher deduction rates citing the peak season.

Accommodation fees at major hotels in Jeju Island are also soaring. At a luxury hotel in Jeju, even the cheapest room grade in early August exceeded 600,000 KRW per night. The same room during the off-season costs around 300,000 KRW per night, showing a twofold price difference. Another luxury hotel raised accommodation fees by 50,000 to 100,000 KRW compared to last year's peak season but increased prices by bundling hotel activities such as an in-house kids' cafe into the lodging package.

From the consumer's perspective, these activities are unnecessary, but to secure a room, they have no choice but to purchase package deals. A hotel industry official explained, "There is almost no price difference compared to last year's peak season. However, as demand has concentrated more this year, discounts previously offered on travel product intermediary sites have disappeared, making prices feel relatively more expensive to consumers."

Meanwhile, leisure platform company Yanolja analyzed this summer's vacation trends based on reservation data from July to August and found that the number of domestic accommodation bookings during this period increased by 109% compared to the same period last year. By region, Gangwon Province (16.9%) and Gyeonggi Province (14.9%) had the highest accommodation reservation rates. Traditional popular vacation spots Jeju Island (14.3%) and Busan (9.8%) followed.