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Submission to the Travel Industry Authority’s Trade Consultation Document on the Implementation Details of the New Regulatory Regime of the Travel Industry

  • Consultation Papers
  • 2022.04.04

  1. The Consumer Council (the Council) is pleased to provide views on the consultation document on the implementation details of the new regulatory regime of the travel industry (the Consultation Document) issued by the Travel Industry Authority (TIA).

 

  1. On the whole, the Council generally supports the implementation details of the new regulatory regime for the travel industry proposed by the TIA as set out in the Consultation Document, including the subsidiary legislation to be made under the Travel Industry Ordinance (the Ordinance), directives applicable to licensees and other matters relevant to the implementation of the new regulatory regime.  However, the Council would like to stress that there are certain components which it considers are of utmost importance in protecting consumer rights in the travel-related services, for instance, transparent information provision, clear and fair tour cancellation and postponement policies, as well as effective redress mechanism.

 

  1. As for effective redress mechanism, the Council is of the view that the TIA should take the lead to promote the use of information technology to enhance redress mechanism and provide easily assessable means for consumers to make an enquiry or submit a complaint.  From time to time, the Council receives comments from consumers that it is difficult for them to make enquiries or submit complaints (e.g. the hotlines are always busy) to the travel agents or the relevant authorities concerned when they have questions or grievances about the travel services.  The TIA may consider making good use of technologies to offer convenient and efficient digital channel to handle enquiries and complaints; in addition, it should encourage the travel industry and individual travel agents to develop their own digital complaint handling platforms to strengthen customer services in this regard.

 

  1. The followings provide the Council’s views on specific aspects proposed in the Consultation Document.

 

Collection, payment and recording of levies

 

  1. Despite having no objection to the TIA’s proposal of continuing the existing E-levy System for the collection, payment and recording of levies,[1] the Council reiterates its recommendation as stated in the previous submission on the Travel Industry Bill in 2017[2] that the TIA may consider increasing the current level of ex gratia payment to travellers arisen from the default of a licensed travel agent, says, from 90% of the loss of outbound fare to a higher percentage limit, so as to provide a better protection to consumers.   

 

  1. The Council notices that the rate of the levy was lowered to 0.15% in May 1997 and was suspended in July 2009, and the maximum amount of ex gratia payments relating to outbound accident protection concerning medical expenses, funeral-related expenses and compassionate visits expenses was raised to a total of HK$300,000 in March 2011.   Despite that the COVID-19 pandemic has caused huge damage to the local travel industry, it may not be good time to raise the level of ex gratia payment and thus the rate of the levy, but the Council hopes that the TIA will review these thresholds from time to time to maintain a sustainable pool of fund when the travel industry recovers steadily in the post-pandemic era. 

 

Scope and information transparency of ex gratia payments of TICF

 

  1. Under the new regulatory regime, the TIA proposes largely maintaining existing arrangement on the ex gratia payment from the Travel Industry Compensation Fund levy (TICF), under which an outbound traveller or his/her representative may apply for an ex gratia payment under the TICF if he/she (i) suffers a loss in respect of an outbound fare; or (ii) incurs expenses in respect of an accident which occurred during an activity provided or organised by a licensed travel agent arising out of and in the course of an outbound travel service and resulting in his/her death or personal injury.

 

  1. The Council has no opposition to such proposals but suggests that clarification or enhancement be made on the followings:

 

Provision of clear definition of specific terms and scope of coverage

 

  1. For the avoidance of doubt, the TIA should clearly define the specific term of “activity” under the proposed Travel Industry Compensation Fund (Amount of Ex gratia Payments) Regulation.  For instance, regarding the definition of “activity provided or organised by a licensed travel agent arising out of and in the course of an outbound travel service”, whether such “activity” includes “optional itinerary (自選行程)” and/or “self-paid activities (自費活動)” which are commonly provided by travel agents as options; and “free time (自由時間)” which are popularly included in itineraries of package tours.

 

  1. Besides, the Council seeks the TIA’s clarification on the nature of the “tours” to which the TICF applies, for instance, whether it applies to charter tours such as wedding tours.

 

Enhancement in transparency and provision of sufficient information

 

  1. In view of the recent incident that although consumers bought cruise packages from travel agencies that paid stamp duty, the TICF did not provide compensation despite the closing down of a cruise company.  The Council would like to emphasise the need to ensure clarity and provide consumers with sufficient information about the eligibility to TICF.  The Council suggests that the TIA should lay down industry guidelines to ensure that consumers have been well informed by travel agents about the status of protection of the travel products or services before purchasing them, such as whether the service provider is a licensed travel agent in Hong Kong and covered by the TICF, and whether the travel product or service offered by the licensed travel agent is covered by the TICF.

 

  1. The Council is pleased to learn that a new definition will be added to the meaning of carting on travel agent business under the Ordinance, stipulating that any persons who carry on any outbound travel business activities at a place outside Hong Kong and actively market, whether in Hong Kong or from a place outside Hong Kong, to the public of Hong Kong any of such business activities will be subject to the regulation.  In view of the increasing number of overseas online travel websites and their easy access to consumers, the Council fully supports the requirement that these online platforms must obtain travel agent licences issued by the TIA before they can carry on such business activities for Hong Kong travellers so as to facilitate regulatory control.  Similarly, the protection status of the travel products or services offers by these online websites should also be made clear to consumers.

 

Provision of education to consumers

 

  1. The Council urges that the Government’s work on public education should be substantially scaled up to empower consumers’ knowledge about their rights and better safeguarding consumer interests, for instances, they should be reminded to patronise licensed travel agents, and understand the scope of protection under the TICF.  The Council suggests the TIA to allocate more resources and efforts in this regard.

 

Procedure for ex gratia payments

 

  1. The TIA proposes keeping the existing means of application and documents required to be submitted for an application for, as well as the time limits for making an application for, and the payment of, an ex gratia payment under the TICF.  It is also proposed to add an arrangement for an outbound traveller to make an authorisation in advance so that the pre-authorised person can apply for an ex gratia payment on his/her behalf and reserve his/her rights to vary and cancel the authorisation.

 

  1. The Council has no opposition to such proposals.  However, the Council suggests that the TIA may consider laying down the scope of the authority of the authorised persons clearly so as to facilitate proper execution in case the authority has to be exercised.

 

Licence conditions relating to cease of business and submission of statement of account

 

  1. The TIA proposes that a licensed travel agent must notify the TIA in writing of the intention of ceasing to carry on travel agent business not less than 14 days before the business ceases.

 

  1. The Council is of the view that the proposed minimum notice period of 14 days may not be sufficient for the travel agent concerned to take necessary actions in safeguarding consumers.  For example, if the travel agent receives instructions from the TIA, before the business ceases, such as commencing the refund process.  The Council suggests the notice period be extended to not less than one month.  On top of that, further extension of the notice period should be considered according to the scale of the concerned travel agent (i.e. the notice period of a large-scale travel agent should be longer than that of a small-scale travel agent).

 

  1. As for requirements related to the submission of statement of accounts, the Council suggests that TIA should explore the possibility of shortening the submission deadline of the statement of accounts (e.g. less than seven months), such that potential financial issues of a company can be noticed in an earlier stage for the TIA’s necessary follow-up.

 

Regulations related to coerced shopping

 

  1. The TIA proposes that a licensed travel agent must take all reasonable steps to safeguard the safety and interests of any participant of the tour group.  Also, in connection with any shopping trip provided to the tour group, all reasonable steps must be taken to ensure that no participant of the tour group is subject to coerced shopping. 

 

  1. To better protect the interest of consumers, the Council suggests the TIA to require the travel agents to disclose the names of the shops where the tours will visit in the tour advertising materials and receipts/invoices.  So that the TIA may monitor if the travel agent is taking the tour to shops which have records of coerced shopping.  This may also facilitate the tour participants to report any suspected malpractices in their shopping trip.

 

  1. Regarding the definition of coerced shopping, the proposed Travel Industry (General) Regulation has further defined “coercion” and “undue influence” while there is no definition of “harassment”.  The Council considers that the definition of harassment should be provided in the Travel Industry (General) Regulation for clarification.

 

Provision of full particulars of the service

 

  1. It is proposed in the Consultation Document that a licensed travel agent must, prior to requesting any payment from a customer for any service to be provided, in their best endeavour give the customer full particulars of the service.

 

  1. To standardise industry practice and to avoid incomplete or omission of important information, the Council suggests to clearly define “full particulars of the service”.  It is of the view that in addition to tour details, all major terms and conditions of services, and breakdown of charges should be provided to the consumers before payment.  Travel agents should also inform the consumers as soon as possible if any of the details has to be changed after the payment.

 

  1. On this matter, the Council considers that the TIA may draw reference from other jurisdictions to provide a template of contract for the use of travel agents and consumers.  For instance, the Tourism Bureau of Taiwan has formulated a contract template for inbound and outbound travel services.  The template includes terms and conditions (which are matters to consumers) regarding self-pay items, the minimum number of people for a tour group and cancellation fee, etc.[3]  The Council believes that providing a contract template, with key information provided in an easy-familiar format, can help to standardise industry practice and to reduce controversy on the service particulars.

 

Expedited procedures for dealing with minor contraventions by licensees

 

  1. Part 8 of the Travel Industry (General) Regulation specifies the expedited procedures for dealing with minor contraventions by licensees.  The Council is of the view that the definition of "minor contravention of a requirement" should be specified (if not have in the Ordinance).  For instance, contravention of which of the requirements and frequency of contravention should they be considered as “minor contravention”.  To achieve sufficient deterrent effect, the Council considers that repeated offenses of minor contraventions should be escalated and result in a higher penalty.

 

  1. The details of "expedited procedures" should also be clearly stated.  For instance, the committee/person(s) who is/are responsible for making judgments in expedited procedures, if any.  The Council is of the view that at least one member of the travel industry and one non-industry layperson should be included for making judgments in expedited procedures, for ensuring independence in the process.

 

  1. While agreeing the need of efficiency in dealing with disciplinary cases, the Council considers it equally important to make the process transparent.  The Council suggests to regularly report to the committee concerned the number of cases that are “minor in nature” and handled in expedited procedures, to facilitate monitoring of the effectiveness of the expedited procedures and enhancing transparency.

 

Issuance and renewal of travel agent licence

 

  1. In regard to the training and examination requirements on travel personnel, the Council suggests that the relevant personnel, including the authorised representative, tourist guide, and tour escort, should receive adequate training on consumer protection and personal data handling for obtaining and renewing his/her licence.

 

  1. Save for training and examinations, the Council suggests the TIA developing binding guidelines, directives and codes of conduct to regulate travel agents, tour guides, tour escorts and other travel service providers for better consumer protection.  It is noted that various jurisdictions have implemented health requirements on tour guides or tour escorts.  For example, Hong Kong and Macau tour guides/tour escorts rendering services in Shenzhen must not carry infectious diseases,[4] while in Malaysia, a tour guide candidate needs to submit a detailed medical certificate from any government hospital/licensed medical practitioner before getting the licence.[5]  The TIA may take reference from other jurisdictions in formulating health requirements on tour guides and tour escorts, or to take note of their health conditions for greater protection and ensuring quality service delivery to consumers.

 

Registration of outbound package tour brochures and the proposed mechanism for emergency (outbound) notification

 

  1. The TIA proposes abolishing the existing requirement for the registration of the brochures of outbound package tours, and establishing a mechanism of notification of emergency situations (outbound).  If an emergency situation (outbound) occurs in any destination of outbound travel, the designated person under the new mechanism is required to immediately or not more than 12 hours in any event, endeavour to submit to the TIA the specified information, including the number of customers of the outbound package provided or arranged by the travel agent and details as the TIA and/or any department of the Government or relevant authority may request in respect of the emergency situation (outbound).

  1. The Council has reservation on abolishing the existing requirement which has the value of facilitating the TIA’s initial assessment as to whether there are any tours or travellers in the destination concerned in case there is an emergency situation.  The Council is of the view that both the emergence notification and the brochures registration mechanisms should be retained. 

 

  1. The TIA may take this opportunity to improve the efficiency of the existing practice and address the problems about the information accuracy of the existing arrangement for registration of brochures as pointed out in the Consultation Document by upgrading the existing registration mechanism through the digitalisation of the registration procedure.  The Council believes that a digital platform for registration, updating and recording of package tours information can facilitate the TIA to grasp the actual situation of outbound package tours in a much more timely and effective manner.

 

  1. That said, should the TIA choose to adopt the proposed new mechanism for emergency (outbound) notification, the Council suggests the TIA to review if there is room for the shortening of the required reporting time limit, as the proposed 12-hour limit seems to be too long in case of serious emergency situation.

 

  1. As regards the interpretation of “emergency situation (outbound)” as proposed in the Consultation Document,[6] the Council suggests to include also “serious crimes (嚴重罪惡)” and “serious incidents which affect personal safety (影響人身安全的嚴重事故)” in the definition.  Besides, to ensure the interpretation is up-to-date to catch up with the ever-changing travel business and global environment, the Council recommends that the TIA should review the appropriateness of the interpretation from time to time.

 

Requirement for notifying customers of cancellation of package tour not for reasons beyond control (outbound)

 

  1. The TIA proposes linking the number of days of the notice period for the cancellation of an outbound package tour with the number of days of the tour, instead of with the destination of the outbound package tour in such a way that a travel agent must notify customers at least one day before departure of the cancellation of any outbound package tour lasting for three days or less; at least seven days before departure of the cancellation of any outbound package tour lasting for four days to nine days; at least 14 days before departure of the cancellation of any outbound package tour lasting for 10 days or more.

 

  1. The Council considers that an overarching principle should be set in the relevant part of the regulation to require travel agents to notify consumers about the cancellation as early as possible.  The cancellation reason(s) should also be provided to the affected customers.

 

  1. For package tour of 10 days or more, the Council is of the view that the proposed 14-day limit to notify customers about the cancellation of package tour is not adequate for the customers to find substitute or to change their holiday plan within such short period of time.  Likewise, the notification time should be longer than 1 day and 7 days for the respective days of tours.

 

  1. Taking reference from the relevant travel industry regulations in the EU and the UK,[7]which provide better arrangements to consumers by specifying that in certain scenarios where a travel organiser terminate a package tour, the notification periods should be 20 days before the start of the package for trips lasting more than 6 days; 7 days for trips lasting between 2 and 6 days; 48 hours for trips lasting less than 2 days, the Council urges the TIA to consider lengthen the respective notification periods to minimise the inconvenience caused to consumers.

 

  1. Besides, as matters of fairness and information transparency, the Council considers it important that the cancellation reason(s) (e.g. the minimum number of tour participants is not reached, cancellation of flights) should also be provided to the affected customers.  If the reasons being that the minimum number of tour participants is not reached, such minimum number should be made known to consumers in advance, for instance, to be specified in the relevant tour brochure, advertising material, booking terms and conditions, receipt or invoice.

 

Outbound package tour service charge

 

  1. It is proposed in the Consultation Document that if, in addition to the tour fare, a licensed travel agent imposes a service charge, i.e. tippings, in respect of an outbound package tour on a customer, the travel agent must state clearly the same in the advertisement, itinerary, booking terms and conditions or any other document of the package tour.

 

  1. In view that the Council received consumer complaints about service charges from time to time, the Council suggests the TIA to review the practice about the imposition of service charges by travel agents and benchmark with the charging arrangements in other jurisdictions.  

 

  1. In case if service charges for the tour escort, local guide and tour coach driver are expected from all participants in the tour by the travel agent (in other words, the service charges are compulsory), the Council suggests that a better arrangement is to include such charges in the tour fare, so that the tour fare could reflect the real out-of-pocket money.  Taking reference from Ontario in Canada, travel agents and wholesalers are required to display the total price to consumers — often called all-in pricing — in any advertising that includes the price of travel services.  This includes all taxes, fees, levies and charges.  If the participants are not satisfied with the services of the tour escort, local guide or tour coach, the Council is of the view that there should be a proper channel for them to submit a complaint or seek redress.

 

Information provision regarding booking services or arrangements

 

General information

 

  1. The Consultation Document states that when accepting a booking, a licensed travel agent must, on request of a customer – (a) provide information on the health requirements necessary for the journey; (b) provide information on the visa requirements necessary for the journey; and (c) so far as is practicable, arrange for the other services requested by the customer.

 

  1. The Council opines that the overarching principle is that a travel agent should proactively provide useful and necessary information regarding the tour to customers as part of their operation, irrespective whether it is requested by the customer or not.  Therefore, the Council suggests to remove the phrase “on request of a customer” from the proposed provision.

 

  1. Besides, the Council suggest to add a further requirement, for instance, to provide information on special items required for the journey (e.g. matters that require special attention due to local conditions for cultural or religious considerations).

 

Receipt or invoice

 

  1. On top of the information[8] specified in paragraph 2.19 of Appendix VI in the Consultation Document which should be clearly and conspicuously stated in any letter, account, receipt, pamphlet, brochure or other documents, the Council suggests that it should include the cancellation, refund and compensation arrangements, itinerary and meal arrangements, the enquiry and complaint channels (e.g. hotline, email, online platform) and procedure of the travel agent, as well as the TIA’s.  Should there be difficulties in including the itinerary and meal arrangements in the receipt or invoice due to space limitation or the arrangement is yet to be confirmed, the Council suggests that such information be provided in the form of appendix or additional information in a separate sheet attached to the receipt or invoice.  For items that are subject to confirmation/arrangement, it would be clearly presented as well.

 

Cancellation of outbound package tour for reasons beyond control (outbound)

 

Handling fees

 

  1. It is proposed that a licensed travel agent must state clearly in information such as the booking terms and conditions of an outbound package tour the fee arrangements (namely the cancellation charges and the handling fees (if any)) if the package tour is cancelled because of reasons beyond control (outbound).

 

  1. For the interest of consumers, the Council is of the view that the basic principle is no handling fee should be charged if such cancellation is not initiated by the consumer.  Nevertheless, the Council is aware that some travel agents may wish to charge a handling fee subject to their business models.  To promote good practices and minimise disputes on handling fees, the Council suggests the TIA to specify in legislation or industry guidelines that the amount of such handling fees should be appropriate and justifiable.  Also, for the sake of information transparency, such handling fee should be made known to prospective customers at sales stage or before they purchase the respective services.

 

Refund of monies paid by customers

 

  1. The Consultation Document mentions that if the travel agent does not impose the cancellation charges, unless the customers agree that the tour fare and other related charges paid by the customers are to be retained by the travel agent for payment of other products or services provided by the travel agent, the travel agent must … refund the monies paid by the customer …within seven working days … from the date of cancellation notice given by the travel agent.  Then it is further specified that such “monies” include but not limited to the tour fare, air passenger departure tax, fuel surcharges imposed by airlines, service charges imposed by the travel agent (handling of visa-related charges), etc.

 

  1. The Council expects the TIA to clarify whether such “monies” include travel insurance charge.  If a customer purchases a travel insurance through a travel agent, and if the coverage of the travel insurance does not include indemnity for cancellation of the tour concerned, the Council considers that the money paid by the customer for the travel insurance should also be refunded in this case.

 

Maximum period of retention of monies

 

  1. It is proposed in the Consultation Document that an option would be provided for the customers to choose whether they agree that the tour fare and other related charges paid are to be retained by the travel agent for payment of other products or services provided by the travel agent.  Then, it is further proposed that if the customers are unable to spend the retained monies before the original deadline for reasons beyond control (outbound), the travel agent must take the initiative to contact the customers to discuss how to handle the retained monies.

 

  1. The Council suggests that the TIA should lay down in industry guidelines the maximum number of postponements of the deadline for the spending of the retained monies.  For instance, in the situation of COVID-19, a tour may be postponed for a prolonged period of time and the customers may not be able to spend the monies retained by the travel agent in its products or services in a foreseeable future, which could be a burden to the customers.  Therefore, for the benefit of consumers, the Council suggests the TIA to lay down the maximum number of postponements of the deadline for the spending of the retained monies (e.g. the period should not over 6 months or the deadline for spending of the retained monies should only be postponed once, whichever is earlier).  After that the monies paid should be refunded to the customers.

 

Withdrawal by consumers

 

  1. Apart from the provisions related to the cancellation of outbound package tour for reasons beyond control by travel agents stated in the Consultation Document, the Council is of the view that consumers’ right to withdraw under similar situation should also be addressed.  The fact is that there are some cases where the customers may wish to withdraw from the tours even the travel agents continue the tours in some incidents.  For instance, in the past two years, there were consumers who preferred withdrawing from the tours even the travel agents did not cancel the tours due to unforeseeable risks happened at the destination.  For example, consumers might be worried about the pandemic situation and infection risk during travel even the destinations were not yet issued red or black outbound travel alerts.  The Council is of the view that such situation could be considered as “withdrawal because of reasons beyond control”. 

 

  1. The Council suggests that the TIA should request travel agents to inform prospective customers and specify in receipts or invoices the refund policy under the situation of “withdrawal because of reasons beyond control”, i.e. whether there would be cash refund, the maximum period or number of postponement deadline should the monies be retained by the travel agents, and the amount of handling fee (if any) should be appropriate and justifiable.

 

  1. Taking reference from the UK, the Package Travel and Linked Travel Arrangements Regulations 2018 specifies that travellers have the right to terminate the package travel contract without paying a termination fee if unavoidable and extraordinary circumstances occur at the place of destination or its immediate vicinity which significantly affect the performance of the package or the carriage of passengers to the destination.  If the traveller does terminate then the organiser must provide a full refund without undue delay and in any event no later than 14 days after termination.

 

Alteration to component of outbound package tour for reasons beyond control (outbound)

 

  1. In relation to any alternation of package tour, the Council is of the view that, for the sake of information transparency, the travel agent should be required to specify in the receipt or invoice in which situation would an additional charge be imposed on customers.  If such situation occurs, the travel agent should provide information about the amount of increase in cost to customers and the additional charge should only be cost-based pricing.  Also, the Council suggests the TIA to define the definition of “component” and on which “component(s)” only could additional charge be imposed on in order to reduce the chance of abuse.

 

  1. Apart from that, as a matter of fairness, if the alteration results in a reduction in the cost (or change in key component) of the package tour, same as paragraph 2.63 of Appendix VI in the Consultation Document,[9] the customers should also be allowed, apart from accepting the refund as specified in paragraph 2.64, to have an alternative option to withdraw from the package tour before its departure.

 

Information on study tour or exchange tour

 

  1. The Consultation Document provides that a licensed travel agent must provide the itinerary, booking terms and conditions and other information of a study tour or exchange tour to the tour participants or the tour participants’ representatives before they sign up for the tour.

 

  1. The Council suggests, for the avoidance of doubt, the provision should also specify that the travel agent must provide the following information:

 

  • Terms and conditions related to change of itinerary (including cancellation or addition of self-paid activities (outbound)); and
  • Terms and conditions related to cancellation of tour, relevant refund or compensation arrangements, arrangement and responsibility of the travel agent should there be an accident during the tour.

 

  1. The Council notices that some provisions in the proposed Directives for Licensees (the Directives) do not apply to outbound charter tours (including study tours and exchange tours), such as provisions in relation to refund arrangements and cancellation of tour, and the Directives specify that the travel agent and the customer(s) of such charter tours enter into a written agreement regarding the services and arrangements.  Having said that, to ensure the consumer rights of charter tours are being reasonably protected, the Council suggests the TIA to review the written agreements of charter tours on a regular basis to assess if they are legitimately written or contain any unfair provisions to the detriment of consumers.

 

Tour-accompanying helper under study tour and exchange tour

 

  1. It is proposed in the Consultation Document if a study tour or exchange tour is travelling on two or more tour coaches, a licensed travel agent must ensure that there is at least one licensed tour escort as a tour-accompanying helper on each tour coach, except where the tour participants of the tour are arranged to travel on different coaches for the purposes of communication between the tour participants and international students, etc.

 

  1. The Council has reservation on the exemption and is of concern if this would create enforcement issue in differentiating the purposes in practice.  For the benefit and safety of exchange students, the Council considers it important to maintain the tour-accompanying helper arrangement.

 

Payment of levy and issue of receipts

 

  1. It is proposed in the Consultation Document that a licensed travel agent must ensure that the sentence of “Travellers must obtain a receipt with a levy stamp to be protected by the Travel Industry Compensation Fund. 旅客必須取得徵費印花收據,方可獲得旅遊業賠償基金的保障。” in English and Chinese, with a size not smaller than the smallest print as shown on the same page of the receipts, must be stated on all receipts.

 

  1. In view that the font size of the print on the receipts may vary between travel agents and to ensure sufficient prominence be given to the sentence, the Council suggests a minimum font size should be set in the Directives.

 

Reminding customers to take out travel insurance

 

  1. According to the proposed arrangements related to travel insurance, a licensed travel agent must remind customers at the time of booking outbound services or arrangements of the importance of taking out travel insurance on their own, and advise that the scope of the travel insurance taken out by the customers should cover all the activities of the journey.  If a tour fare includes travel insurance, a licensed travel agent must provide customers with information on the travel insurance to enable the customers to understand clearly the insurance coverage.

 

  1. The Council would like to reiterate its view against bundling sale of travel insurance.  In its survey on 18 travel agents published in November 2019, the Council found the widespread practice of selling travel insurance to consumers enrolling for package tours.  In particular, six used bundle sale tactics to sell package tours together with travel insurance.  The Council is of the view that the use of such bundle sale tactics not only deprives consumers of their right to choose but the insurance cover also may not best suit their needs.  While a wide range of travel insurance products is available for the choice of consumers on the market, travel agents offer only one single product with some insurance premiums as high as 30% of the tour price, which is clearly disproportional.  

 

  1. The Council urges the TIA to devise clear guidelines on the practice of travel agents in the sale of travel insurance and the relevant authorities should also consider regulatory oversight to safeguard the consumers’ right of choice.  From the perspective of consumers, they may perceive that the purchase of bundled travel insurance would provide them sufficient coverage for the package tour.  The Council is therefore of the view that the protection of the travel insurance bundled with a tour provided by a travel agent should fully cover the entire journey and all participants, including activities at the travellers’ own expenses and all age groups (children and elders) on the tour.  If the travel insurance could only cover certain parts of the tour, it must be clearly explained to the consumers in both verbal and written forms, so that they can make an informed choice if they opt to or opt not to buy it from the travel agents.

 

Advertisement for outbound package tour

 

  1. It is mentioned that the information which should be indicated in an advertisement for outbound package tours, for instance, the prices and duration of the package tours, together with full names, abbreviations or logos of the relevant airlines.  For the sake of clarification and avoidance of disputes in relation to cancellation of tour due to minimum number of participants does not reach, the Council suggests that such number (if applicable) should also be clearly indicated in the advertisement.

     

    Alteration of items in the itinerary for reasons beyond control (Inbound tour)

     

  2. The Consultation Document states if a licensed travel agent has cancelled or altered any item in the itinerary for any reasons beyond control (inbound), resulting in an increase in the operation cost, the travel agent may, without contravening any provision of the contract, recover from the participants of an inbound tour group a sum equal to the actual increase in the cost.
  3. Different from outbound tour as specified in paragraphs 2.63 to 2.65 of the same appendix, the proposed provision does not specify the responsibility of a travel agent should there be a reduction in the operation cost resulted from a cancellation or alteration of any item in the itinerary for any reasons beyond control.  The Council seeks the TIA to clarify whether in such case the tour participants could be offered a refund in proportion to the reduction in the cost.  Also, should there be a refund arrangement, it should be repaid within a reasonable period.

     

    Administration scheme for registered shops for inbound tour groups

     

  4. With regard to tour’s shopping activities, the TIA proposes broadly following the existing practices of the Travel Industry Council of Hong Kong (TIC) that a shop planning to receive inbound tour groups for designated shopping activities must first complete the registration procedures under the “Administrative Scheme for Registered Shops for Inbound Tour Groups” (Administrative Scheme) through the relevant travel agents; and that a registered shop must execute an undertaking with the TIA on matters such as offering refunds for goods and implementing crowd management.

     

  5. The Council would like to point out that it previously received complaints on the malpractices conducted by some travel agents/registered shops for inbound tour groups, such as not issuing receipts to shoppers/bringing the tour groups to non-registered shops.  The Council urges the TIA to enhance its enforcement effort in this regard, as well as to require travel agents to provide consumers with comprehensive travel information in relation to visits of the registered shops including the names of the registered shops to be visited and the stay time in the respective registered shops. 

     

    Conclusion

     

  6. To maintain Hong Kong's position as the top destination city for visitors in Asia and meet the substantial travel demand of Hong Kong consumers, the Council encourages the TIA to make good use of this golden opportunity to bring in more customer-centric measures under the new regulatory regime for better protection of the travelling public and of Hong Kong’s reputation as a tourists’ paradise. 

     

       


      [1] The levies refer to the Travel Industry Compensation Fund levy and the Travel Industry Council levy, which are to be paid by travel agents in respect of every outbound fare received by them, and the levies be paid at the same time as a single sum through the E-levy System.

      [2] https://www.consumer.org.hk/tc/advocacy/consultation-papers/20170509

      [3] Tourism Bureau of Taiwan. 國內旅遊定型化契約範本. https://www.ey.gov.tw/Page/AABD2F12D8A6D561/4d2652e9-992b-419a-ae59-35580932ea08

      [4] http://www.sz.gov.cn/szzt2010/wgkzl/jcgk/jchgk/content/post_9530339.html

      [5] https://www.motac.gov.my/en/faqs/tourist-guide-course

      [6] Refers to Appendix VI, page 4 of the Consultation Document: “emergency situation (outbound)” (緊急情況(外遊)) means a situation where any war, political unrest, terror attack, natural disaster, pandemic, adverse weather, serious traffic accident, etc. occurs”

      [7] The Directive (EU) 2015/2302 on package travel and linked travel arrangements of the EU, Article 12, Paragraph 3. The Package Travel and Linked Travel Arrangements Regulations 2018 of the UK, Part 3, Regulation 13.

      [8] Appendix VI, Paragraph 2.19: … a receipt or invoice issued by a licensed travel agent or the travel agent’s representative to a customer must contain details on the travel service or product booked and must also contain the following information (if applicable) –

      (a) the telephone number, email address and (if applicable) address of the travel agent;

      (b) the number of the invoice and/or receipt;

      (c) the name of the payer and/or the person who will use the travel service or product booked; (d) the price of the travel service or product;

      (e) the amount of deposit or outstanding balance paid, or the amount of payment in full;

      (f) payment details, including the name and amount of each payment item;

      (g) the booking date and payment date;

      (h) description of product –

          (i) (for an air ticket) one way or return, the destination, name of the airline, flight number and class;

         (ii) (for an air-plus-hotel package) one way or return, the destination, name of the airline, flight number and

                class, and the name, location and room type of, and dates of stay in, the hotel(s);

        (iii) (for a cruise product) the destination, the name of the cruise ship, the number of days of the trip and the

                room type;

        (iv) (for an outbound package tour) the destination and the duration of the tour;

         (v) (for a booking of hotel rooms) the name, location and room type of, and dates of stay in, the hotel(s);

        (vi) (for an application for a visa) the visa fee and handling fee; and

       (vii) the departure and return dates, or the validity period of the relevant service and product.

      [9] Paragraph 2.63 of Appendix VI in the Consultation Document specifies that if a licensed travel agent alters a component of an outbound package tour prior to departure for reasons beyond control (outbound) which results in an increase in the cost of the package tour, the travel agent must notify customers without delay and allow the customers to, without prejudice to their legal rights and obligations, elect to pay an additional charge to continue to participate in the package tour or withdraw from the package tour before its departure.  Further in paragraph 2.64, it proposes that if such alteration results in a reduction in the cost of the package tour, the travel agent must refund, or (in the event a customer pays for the outbound package tour by credit card) arrange to refund, a sum in proportion to the reduction in the cost of the package tour to the customers within seven working days (exclusive of the date of notice given by the travel agent) from the date of alteration notice given by the travel agent.

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