Forced Cancellation of Accommodation a Day Before Peak Season... "Customer Anger, Who Will Take Responsibility?"

Government Implements 'Pinpoint Quarantine' Instead of Level 3 Social Distancing
Announced One Day Before Christmas Holiday
Detection If Room Booking Rate Exceeds 50%
Industry Finds It Difficult to Set Cancellation Criteria
Frontline Workers Suffer Each Time Policy Changes

[Asia Economy Reporter Cha Min-young] "The policies keep changing every day, and the stress on the ground is about to explode. Who will bear the anger of customers who were forced to cancel their accommodations just one day before the Christmas rush?"

The government's 'pinpoint quarantine' policy, introduced as a special year-end quarantine measure instead of raising social distancing to level 3, has thrown the lodging industry into a panic. With a makeshift policy announced just one day before Christmas Eve, frontline staff are left to handle the anger of customers who received cancellation notices. A hotel industry official said, "Following the F&B service staff yesterday, today the room sales team members are taking turns apologizing to customers, but after a whole day of being insulted and apologizing, we are completely drained."

The Central Disaster and Safety Countermeasures Headquarters (CDSCH) announced on the 22nd enhanced special quarantine measures including reducing the room occupancy rate of major tourist area accommodations to below 50%. With social distancing strengthened in the metropolitan area and travel demand increasing by region, the aim is to block accommodations first. This applies nationwide from December 25th, Christmas, through the year-end and New Year holidays until January 3rd. Gatherings of five or more people, excluding families living at the same address according to resident registration, are also prohibited. If caught, both the host and participants will be fined 3 million KRW each.

Reduce by 50% One Day Before, Confusion on the Ground

The lodging industry is criticizing the ambiguous government guidelines during the peak season when customers flood in, causing confusion on the ground. The government has not clearly presented cancellation and refund regulations under the national emergency. Since the enforcement authority is the local government to which the business belongs, and detailed guidelines have not been issued by each local government, companies find it difficult to respond to customers. A representative from Hotel A in Jeju Island said, "Most places have an average occupancy rate below 50% in December, so there is nothing more to reduce," adding, "We have not been given any explanation on how the 50% standard was set, so from the company's perspective, it is frustrating."

Many places are particularly struggling with how to set criteria for forced reservation cancellations. Resorts located in rural areas with relatively large numbers of simultaneous guests recorded reservation rates above 50% due to the year-end rush. For example, Company B's nationwide resort room reservation rate averaged 51% from December 24th to 26th and 75% from December 31st to January 2nd. Company C also reported an average reservation rate exceeding 90% for resorts in the Gangwon region. Reservations in Gangwon-do, including Jeongdongjin, a famous sunrise spot at the beginning of the year, are known to be around 80-90%. Private pensions catering to families with infants are in a similar situation.

Government Makes the Policy, We Take the Heat

Hotels are considering ways to resolve the issue without causing discomfort to guests. Some have started informing customers since the day before, asking for their 'voluntary cancellation' intentions, while others notify forced cancellations in order of recent reservations. A representative from Hotel D in Seoul said, "We have closed the swimming pool and fitness center and are barely operating the hotel restaurant at 60% of its usual capacity," adding, "The stress felt by frontline staff when informing customers of ever-changing guidelines is so severe it could lead to depression."

There are also calls for more prior consultation between the central government and local governments before announcements by the CDSCH. For example, some local governments responsible for enforcement have implemented policies that conflict with the central government. Sokcho City in Gangwon-do, home to many sunrise spots, lowered social distancing from level 2 to 1.5 on the 19th but reversed its stance after the central government announced closures of major tourist sites. The city plans to raise the level back to 2 if confirmed cases emerge, citing threats to the survival of self-employed and small business owners as the initial reason for lowering the level.

Varied Cancellation Fee Policies Cause Consumer Harm

Consumers are also confused because they do not know how cancellation fees will be applied even if they want to cancel reservations. Many small and medium-sized pensions have cancellation fee policies that do not allow cancellations less than 7 to 15 days in advance, unlike high-turnover luxury hotels. The government's official stance is to exempt 50% of cancellation fees according to the Fair Trade Commission's standards. Hotels and resorts generally do not charge consumers cancellation fees, but small and medium pensions struggling financially may face consumer disputes. Kim Jin-ho (pseudonym), who operates a small pension on a major domestic online travel and hotel community, said, "It is really difficult to respond whenever I fight with customers over cancellation fees," adding, "Just yesterday, cancellations were flooding in, and after losing year-end customers, I don't know how I will survive until next year."

Professor Han Jin-soo of Kyung Hee University's Department of Hotel Management said, "While public safety is indeed the highest priority, if the hotel association had been informed in advance, the industry could have prepared accordingly," adding, "Year-end is a season with many collaborative marketing efforts with credit card companies and many events targeting high-loyalty VVIPs. If these customers develop a negative impression, it could cause intangible damage beyond visible sales losses."

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