Due to the Impact of COVID-19, Disputes Over Travel and Wedding Venue Cancellation Fees Surge... "May Is a Critical Point"

Postponement of Family Events Such as Weddings Due to COVID-19

Rapid Increase in Disputes Over Penalty Fees

6.7 Times More Than Same Period Last Year

Fair Trade Commission Requests Industry Cooperation... Industry Appeals "We Are on the Brink of Closing"

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[Sejong=Asia Economy Reporter Joo Sang-don] In May this year, bride-to-be Ms. B, who was planning to hold a wedding at a banquet hall in Gangdong-gu, Seoul, postponed the wedding to the end of August due to COVID-19 and paid a 20% penalty fee on the ceremony cost. Ms. B said, "I postponed because of the unavoidable situation caused by COVID-19, but the banquet hall imposed the full penalty fee citing their regulations. It was upsetting, but if I delayed the decision further, the penalty fee burden would increase, so it was an unavoidable choice."

Disputes over penalty fees arising from postponing weddings or canceling overseas trips due to the impact of COVID-19 continue to surge. Weddings scheduled for March to April this year were mostly postponed without penalty fees, but weddings in May require penalty payments.

◆Consumer Disputes Surge Despite Fair Trade Commission's Request= According to the Korea Consumer Agency on the 6th, from January 20, when the first domestic COVID-19 case was confirmed, to the 1st of this month, there were a total of 19,177 consultations related to overseas travel and weddings. This is 6.7 times (572.6%) higher than the same period last year (2,851 cases). By industry, consultations related to overseas travel, including package and independent travel, were the highest at 8,019 cases, a 725.8% increase compared to last year. This was followed by ▲air passenger services with 3,678 cases ▲food services such as first birthday parties with 2,619 cases ▲domestic and international accommodations with 2,479 cases ▲weddings with 2,382 cases.

Consumers often requested exemption from penalty fees, arguing that cancellations were unavoidable due to COVID-19, or requested reductions because the penalty fees were excessively high. The relevant departments of the Consumer Agency are almost paralyzed due to the surge in related consultations.

Prior to the surge in penalty fee disputes between consumers and businesses, the Fair Trade Commission held meetings with the Korea Association of Travel Agents (February 7 and 27), airlines (February 13), the Korea Wedding Industry Association (March 4), and six consumer organizations (February 20). Through these meetings, the Fair Trade Commission requested the travel and wedding industries to make every effort to resolve disputes within the scope allowed by their business conditions, fully considering the consumers' unavoidable cancellations.

However, despite the Fair Trade Commission's requests, disputes related to penalty fees have not decreased. The industry understands that travel and wedding postponements or cancellations due to COVID-19 are unavoidable but realistically finds it difficult for businesses to bear all penalty fees. A representative of the Korea Wedding Industry Association said, "For weddings in Seoul, fixed costs such as rent, labor, and management fees amount to about 200 million won per month, so it is difficult for business owners to bear penalty fees unconditionally. The current business conditions are severe, and if weddings scheduled after April are postponed or canceled, many banquet halls will inevitably have to close."

◆Industry Says "We Are on the Brink of Closing"... Fair Trade Commission Has No Measures= Earlier, following consultations with the Fair Trade Commission, the Wedding Industry Association notified its members that if consumers wished to postpone weddings scheduled for March to April, they could do so without penalty fees for up to three months by submitting a performance confirmation letter. According to the Wedding Industry Association, about 80% of weddings scheduled for March to April have been postponed to July or August through this measure. For the remaining 20% who canceled, those with 29 to 59 days remaining paid 20% penalty fees, and those with less than 29 days paid 35% penalty fees.

The problem is May. Since weddings in March and April were postponed to more flexible periods, there are almost no available dates left to postpone further. A representative of the Wedding Industry Association said, "The industry calls it 'remaining time,' and July to August is such a period, so weddings scheduled for March to April were postponed to this time without penalty fees. For May weddings, postponement is impossible, so cancellations are inevitable, and in this case, consumers face penalty fees and businesses cannot avoid operational losses."

The Fair Trade Commission recognizes the seriousness of the problem but has not prepared any clear measures other than requesting businesses to "fully consider consumers' difficulties." It is difficult to unilaterally impose penalty fee burdens on businesses for weddings and travel, which are based on private contracts. A Fair Trade Commission official said, "We are planning to include resolution standards for penalty fee disputes related to infectious diseases like COVID-19 in standard contracts in the future. However, this is difficult to apply retroactively to the current COVID-19 situation, so we will actively seek ways to reduce consumer burdens through additional consultations with related industries."

This content was produced with the assistance of AI translation services.