Different Refund Policies for Banquet Halls... What About Year-End Hotel Parties?

Accommodation Business Group Hosted
Full Refund Due to Government Total Ban
No Regulations for Individually Hosted Gatherings

[Asia Economy Reporter Lim Hye-seon] Office worker Kim Su-jin (33, pseudonym) faced a setback after renting a hotel party room (banquet hall) for a Christmas party in early last month. After social distancing was raised to level 2.5, she requested a cancellation from the hotel but was informed that the deposit refund was difficult. The reason for the refund refusal was that only events hosted by the hotel were prohibited, and in Kim’s case, the number of attendees was under 50. Even though gathering more than 30 people in a restricted space poses a risk of COVID-19 infection, she is forced to proceed with the party reluctantly due to contract terms. Otherwise, she must forfeit 100% of the deposit. Kim said, “I’m torn between going ahead with the party or giving up the deposit,” and pointed out, “It’s unfair that events hosted by the hotel are fully refundable, but those reserved by individuals are non-refundable, even though they are held at the same hotel.”

On the 10th, the government restricted all types of parties hosted by companies and organizations, but there are no prohibitions on parties hosted by individuals, causing confusion among consumers. Because refund policies for cancellations due to strengthened social distancing are unclear, some consumers reluctantly proceed with their parties. As confirmed cases continue to rise daily, there are even cases where people hold parties to avoid financial losses despite wanting to voluntarily participate in quarantine efforts.

A representative from a luxury hotel explained, “In cases of force majeure such as natural disasters or reasons beyond the hotel’s reasonable control that prevent the use of the scheduled event venue, the full deposit already paid is refunded to the customer,” adding, “Since the COVID-19 outbreak, most contract cancellations have been refunded.” Smaller hotels and party rooms mostly adhere to their own contract clauses that do not allow deposit refunds. According to the revised consumer dispute resolution standards announced by the Fair Trade Commission last month, if an infectious disease crisis alert is issued at the ‘severe’ level and contract fulfillment becomes difficult due to quarantine guidelines, a 20% reduction in penalty fees should be applied. However, since this is not a mandatory rule, most places maintain a policy of no refunds for cancellations within 7 days. Ultimately, customers must either forfeit the prepaid fees or proceed with the party as planned.

The government strengthened quarantine measures for facilities with a high risk of COVID-19 infection by raising social distancing to level 2.5. In particular, year-end events or parties hosted by hotels, party rooms, guesthouses, or companies and organizations were completely banned. Accommodation facilities fully refunded those who were to participate in events directly hosted by them according to government guidelines. However, refund policies vary depending on the hotel for parties hosted by individuals. The problem is that, according to the regulations, gatherings hosted by companies or organizations can still be held if booked under an individual’s name, which is pointed out as a loophole in quarantine measures.

Hotels are also in a difficult position. Small-scale hotels say that if they cannot rent out party rooms for year-end events, it will be difficult to pay their employees’ salaries. In fact, many tourist hotels have temporarily closed or shut down entirely since the COVID-19 outbreak. A hotel representative lamented, “We are complying with the government’s quarantine guidelines,” but added, “If we cancel all reservations and provide refunds without standards, it will be impossible to operate the hotel.”

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