Year-End and New Year Enhanced Quarantine Measures: Trends in Disputes and Resolutions Regarding Accommodation Reservation Cancellations and Refunds
[Asia Economy Reporter Moon Chaeseok] Cho Sung-wook, Chairman of the Korea Fair Trade Commission, visited the accommodation platform company Yanolja on the 29th to check the status of reservation cancellations and refunds due to the novel coronavirus infection (COVID-19) and emphasized the importance of consumer damage relief.
This was because it was anticipated that disputes between consumers and businesses would increase due to reservation cancellations and refunds at accommodation facilities during the strengthened quarantine measures implemented from the 24th of last month to the 3rd of next month.
During this period, accommodation facilities such as hotels, resorts, and guesthouses must limit reservations to within 50% of rooms and prohibit lodging for more people than the room capacity.
According to the Korea Consumer Agency, an average of 181.3 inquiries per day regarding accommodation reservation cancellations and refunds occurred over three days from the 22nd to the 24th. This is a 3.7-fold increase compared to the daily average of 44.3 cases from the 1st to the 18th.
According to the accommodation platform industry, the customer-side reservation cancellation rate from the 22nd to the 27th was 19.9%, more than double the 9.1% during the same period last year. The accommodation providers’ cancellation rate was 2.7%, three times the 0.9% in the same period last year.
Chairman Cho announced that the Fair Trade Commission established standards for penalty fee sharing applicable to the accommodation industry in relation to large-scale infectious diseases last month.
According to the Fair Trade Commission’s sharing standards, if social distancing levels 2 and 2.5 measures are implemented, no penalty fees are charged when contract terms are changed, and 50% of the penalty fee must be waived when the contract is canceled.
On the 22nd, the Fair Trade Commission, Happy Dream (Consumer Comprehensive Support Portal), Central Accident Response Headquarters, Consumer Agency, and SNS posted promotional materials such as card news that easily explained dispute resolution standards.
They also announced that government-level support measures have been prepared for accommodation industry businesses expected to suffer damage due to business restrictions from strengthened quarantine measures.
Chairman Cho expressed gratitude toward Yanolja for taking the lead in consumer protection, including being the first in the industry to obtain Consumer-Centered Management (CCM) certification.
Only companies that organize all management activities providing products and services centered on consumers can receive CCM certification.
Chairman Cho said, "Let us minimize damages caused by penalty fee disputes that may arise due to the year-end and New Year quarantine strengthening measures by joining forces between the Fair Trade Commission and platform operators."
He added, "As the Fair Trade Commission is promoting a full revision of the 'Electronic Commerce Consumer Protection Act,' I ask Yanolja to continue playing a more active role in consumer protection."
Chairman Cho also heard about the compliance status of quarantine rules in spaces where many employees gather, such as the Yanolja call center, through a video conference. He urged thorough measures to prevent confirmed cases and spread.
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