Lodging Industry Suffer Byrom’s Cancellation of Rooms

Korea`s lodging industry, including 2002 FIFA World Cup`s designated domestic tourist hotels, might get to go through great damages due to the violence of Byrom Consultants Ltd., a UK liability company doing business as the "FIFA World Cup™ Accommodation Bureau" ("WCAB").

Last year, Byrom had secured 796,158 guest rooms in 217 Korean tourist hotels which amounts to 70% of the whole World Cup period. However, Byrom made cancellations on 562,863 guest rooms, 70.7% of the original number, and put domestic lodging industry in great financial loss. Byrom did not have to pay the penalty for breach of contract until April 30. And Byrom is refusing to pay the penalty for further cancellations on 29,033 guest rooms that took place in May, and complaints are arising from the domestic accommodation sector.

According to Byrom and domestic lodging industry`s last year`s agreement, through KOWOC Byrom should cancel all unconfirmed guest room reservations by April 30 when notifying by document before 30 days of confirmed lodging, could make cancellations on 15% of the total number of secured rooms without being charged of penalties; from 3 to 30 days before the confirmed date of lodging, could cancel without penalty 10% of the total number of the secured rooms.

Problematic part is the "total number of guest rooms," which is the standard for deciding on penalty exemptions. According the domestic hotels, the "total number" counts up to 233,395, its standard being April 30 when there were no unconfirmed guest rooms according to the contract. On the other hand, Byrom insists that the number should only account for the original amount of 796,158 rooms. Through Byrom`s viewpoint, cancellations made in the month of May only amounts to 10 to 15%, thus unnecessary for them to pay any penalties.

Domestic lodging sector was infuriated with the penalty issue, on top of their worries caused by the empty rooms due to Byrom`s sudden cancellation on 277,683 guest rooms in April alone with the World Cup approaching just ahead. The shock had been great for Hotel A, which sustains great loss from the sudden cancellation report at the end of last month. "Byrom is interpreting the contract in their own favor, and in worst situations we are even ready to file a suit on this case," said a person related to the hotel.

Byrom is insisting that as uncertain as which countries will go to the round of 16 matches and the shape of the tournament map are, it was inevitable for them to maintain unconfirmed guest rooms. Currently, of the total of 204,262 guest rooms secured by Byrom, only 172,968 rooms have been confirmed, leaving possibilities of 31,294 additional cancellations for the remaining secured guest rooms.

As Byrom, FIFA`s Official Ticketing Bureau, who is already in trouble because of too many empty seats in the stadiums provoked another issue concerning accommodations related industries are expressing resentments, saying "neither FIFA who had appointed such bogus company as the official bureau nor KOWOC who hadn`t even thought of a solution to such problem is understandable."

Keuk-In Bae bae2150@donga.com