A Lodging Business's One-Sided Reservation Cancellation Before a Big Concert—How Should Consumers Respond?

Whenever a large concert or regional festival that draws worldwide attention is held, there is a chronic problem that brings consumers to tears. It is lodging businesses' sudden price hikes and one-sided reservation cancellations. The pattern is to notify a consumer—who booked lodging at a reasonable price months earlier—of a cancellation citing a system error or double booking, and then resell the same room at a markup of hundreds of thousands of won. When one suffers such unfair harm, one can actively assert consumer rights through clear regulations and reporting systems.

When a lodging business one-sidedly cancels a reservation, the consumer can demand not only a refund but also additional damages under the Consumer Dispute Resolution Standards published by the Fair Trade Commission. According to the dispute resolution standards, when a lodging reservation is cancelled due to a cause attributable to the business, the compensation ratio differs depending on the timing of the cancellation notice. On a peak-season weekend basis, if the cancellation notice is received up to 10 days before the scheduled use date, a full refund of the deposit can be obtained.

On the other hand, when the cancellation is notified close to the scheduled use date, the compensation standard the consumer can demand becomes even stronger. From 7 days to 1 day before the scheduled use date, in addition to the deposit refund, 20% to 80% of the total charge must be compensated, and if the cancellation notice is received on the day of use, damages can be claimed. Therefore, one should not hastily settle or agree to the cancellation just because the operator offers a full refund; one must demand the clear compensation amount according to the regulations.

In addition, if one detects circumstances in which the operator cancelled the reservation citing a system error and re-listed the room at a much higher price on a lodging reservation platform, this may constitute an intentional act of deception. At this point, the most important thing is early evidence collection. One must be sure to secure the one-sided cancellation notice text or a call recording, the existing reservation details, and a screen (screenshot) showing that the room is being resold at a high price. Based on this evidence, one should immediately report to the Consumer Counseling Center, the Tourism Complaint Report Center operated by the Korea Tourism Organization, or the relevant local government's civil complaint call center. A business against which a report is filed may become subject not only to a local government administrative disposition but also to a high-intensity tax investigation into possible tax evasion after its name is transferred to the National Tax Service.

If administrative reporting alone does not bring immediate recovery of the harm or the operator refuses compensation, one should actively consider sending a certified content-verified mail based on an attorney's assistance. Before going to litigation, certified mail that specifies the relevant legal violations in the name of a legal representative and forewarns of future civil and criminal measures becomes, in itself, an effective alternative that pressures the operator and leads to an amicable settlement and compensation.

Attorney Woo Yeon-jin of Daeryun LLC said, "A lodging crisis during large festival periods is a clear act of disrupting market order by exploiting consumers' desperate psychology," adding, "If you were unfairly subjected to a reservation cancellation or forced to bear an absurd markup, you need to respond by collecting objective evidence and actively reporting to the relevant agencies. The consumer's exercise of legitimate rights and a firm early response are the surest way to root out the illegal profiteering practices packaged under the name of a tourism boom."

Enet News, Reporter Park Jeong-woo (woo@enetnews.co.kr)

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