Excessive cancellation penalties for accommodation booking in Japan

Outline of the case:

On July 25, 2016, a Korean consumer booked an accommodation at a guesthouse in Japan via an online booking site. Due to personal reasons, she had to cancel the subject booking on August 8, 2016. But total accommodation expenses for four nights (KRW 142,403) have been charged with the consumer’s credit card on the scheduled check-in date (August 15, 2016). Since she cancelled the subject booking a week before the check-in date, the consumer claimed that charging total expenses was too harsh and unfair.

Our suggestion:

Given the contract term for free cancellation due before August 8, 2016, the consumer is required to pay certain cancellation penalties. But the conditions of use set by the guesthouse clearly state that a guest shall pay a penalty equivalent to one (1) night accommodation fares in case of booking cancellation. By the terms, charging total accommodation fares (four nights) for the cancellation penalty is regarded not only unfair but breach of contract. Therefore it is advised that the consumer request the guesthouse to reimburse the accommodation fares for three nights.