Ahead of the Busan Fireworks Festival, to be held on November 7 around Gwangalli Beach and Gwangan Bridge, the issue of price gouging by accommodation businesses has come under scrutiny again. Critics have long pointed out that because Busan has fewer accommodation facilities than Seoul, room rates surge whenever a large-scale concert or festival is held.
Controversy over excessive rate hikes by accommodation businesses also spread during BTS's concert in Busan this year. However, Busan City's response was effectively limited to guidance, and analysts said this was because there is no legal basis to clearly define or sanction price gouging.
In June, prompted by the BTS concert in Busan, the government released the implementation status and future plans of its measures to eradicate price gouging. The core is a "price gouging-free pricing system" (바가지 안심 가격제도) under which accommodation businesses report their rate ceilings for each period to local governments and make them public. Along with introducing this system, the Ministry of Culture, Sports and Tourism is also reviewing an amendment to the Tourism Promotion Act that would sanction the unilateral cancellation of reservations without a legitimate reason.
Several related bills have also been submitted to the National Assembly, but all remain pending. Lee Su-jin, a lawmaker of the Democratic Party of Korea, submitted a bill that would impose a fine of up to 3,000,000 won for violating obligations to report, post and comply with room rates during holiday seasons and large-scale concert and festival periods, or for cancelling reservations without a legitimate reason. In cases where an existing reservation is cancelled and the room is then resold at a higher price, a penalty surcharge of up to 50 times the resale amount could be imposed. However, similar bills have been repeatedly submitted in the past, and none has passed the National Assembly.
Experts say legislation must be expedited. Professor Oh Chang-ho of the Department of Tourism and Convention at Youngsan University said the most reliable method is to require accommodation businesses to report their rate ceilings for the festival period to local governments and to disclose their maximum base room prices, adding that local governments should give incentives to accommodation businesses that take part in price reporting by promoting them.
Meanwhile, as the festival draws hundreds of thousands of people every year, competition for spots when viewing from land and traffic congestion are also cited as inconveniences. Eastern Cruise operates a cruise package in which passengers watch the fireworks from the sea and then head to Fukuoka, and it has reportedly recruited 120 Japanese tourists so far. The festival is hosted by the Busan Festival Organizing Committee, and inquiries can be made at 051-713-5000.
The detailed schedule can be found on the festival details page.