"Easy Cancellation" Promised, but Instead Consumers Face Penalty Fees and No Refunds... Complaints Surge Sixfold in Three Years

Only Acting as Intermediaries, Avoiding Responsibility
Korea Consumer Agency: “Urgent Need for Institutional Reform”

Cases in which travelers experienced disruptions to their itineraries or were unable to receive refunds after booking flights and accommodations through online travel agencies (OTAs) have surged sharply in recent years.

According to data submitted by Lee Yangsoo, a member of the National Assembly’s Political Affairs Committee from the People Power Party, based on materials from the Korea Consumer Agency, there were 1,422 consumer dispute resolution requests related to OTAs last year. This figure is about six times higher than the 241 cases reported in 2021, marking a significant increase over three years.

Travelers are bustling in the duty-free area of Terminal 1 at Incheon International Airport during the summer vacation season.

This statistic aggregates reports involving seven major OTAs: Booking.com, Agoda, Airbnb, Hotels.com, Expedia, Trip.com, and Ctrip. As of the end of July this year, 1,350 cases had already been filed, and considering travel demand in the second half of the year, the total number of cases could potentially double last year’s figure.

The surge in OTA-related complaints is attributed to two main factors: the rapid recovery of pent-up travel demand following COVID-19, and the ease of booking flights and accommodations via mobile or web platforms. However, consumer dissatisfaction is also growing due to issues such as information errors, excessive cancellation fees, and delayed refunds.

While most complaints in 2021 and 2022 centered on trip cancellations and refund requests due to COVID-19, more recent cases have involved issues such as refund policies that make it difficult to get a refund even immediately after booking, discrepancies between actual accommodation or flight details and the information provided, and failures to honor lowest price guarantees.

There is also analysis suggesting that consumers are facing even greater confusion, as OTAs often limit their role to intermediaries between airlines or accommodation providers and avoid responsibility, while simultaneously promoting phrases like "lowest price" and "easy cancellation" in their advertisements.

Over the past four years and seven months, the number of complaints received by OTA was as follows: Agoda with 2,190 cases, Trip.com with 1,266, Airbnb with 332, Booking.com with 258, Hotels.com with 154, Expedia with 93, and Ctrip with 26 cases.

Of the 4,319 total cases reported to the Korea Consumer Agency, only about 60% resulted in refunds or compensation. Specifically, 2,326 cases (53.8%) were resolved with refunds, while 255 cases (5.9%) resulted in monetary compensation.

Complaints related to airlines have also increased significantly. The number of cases involving the five major domestic airlines jumped from 82 in 2021 to 825 last year-a more than tenfold increase. This trend has continued this year, with 502 cases recorded by July. For foreign airlines, cases rose from 125 in 2021 to 319 last year, a 1.5-fold increase.

Lee Yangsoo stated, "As bookings through OTAs surge, related disputes are also rising rapidly. It is necessary to systematically disclose cases of consumer harm so that consumers can make informed choices, and to implement institutional reforms to address practices such as excessive penalty fees and refusal to issue refunds."