The Consumer Council has recommended that the price of outbound packaged holiday tours should be inclusive of any service charge that is compulsory on the consumers.
The proposal is modelled on the practice of some restaurants offering what is commonly known as "all-fees inclusive banquet ( 
)", which charge a nett price inclusive of the usual tipping charge.
In a Council's survey, it was found that 16% of the respondents resented the compulsory nature of service charge without due regard to the quality of service of the tour guides.
Consumers were also dissatisfied with the practice that tips were paid on a day-by-day basis even if, for instance, a purportedly 4-day tour which departs in the evening and returns in the morning, would amount to four days' tipping although the service rendered is at most 3 full days.
Probably because of the perception gained in briefing given to travellers prior to departure that the collection of service charge is a standard trade practice, the survey found that 72% did pay the exact amount of service charge "recommended" by the travel agents to the tour guides and drivers, with over half of them considered the amount to be reasonable.
The amount of service charge can in fact represent a significant percentage of a packaged tour price on some destinations, especially after the peak season.
For example, a 5-day tour to Thailand could be as low as $1,100 but the amount of tip could run from $500 to $550, representing some 50% of the tour price. For a shorter duration tour, for instance, a 4-day tour to the Philippines could be only $1,100 but the tip could amount to anything from $380 to $450.
The Council was given to understand that some travel agents use low tour prices to entice consumers but subsidize the costs with compulsory high service charges. Consequently, the Travel Industry Council (TIC) has issued a new directive, which puts a ceiling on the daily service charge ($50-$150) of packaged tours.
A concern has been raised that though the TIC new initiative can bring about the intended outcome, it has somehow the effect of serving to officially endorse this undesirable tipping practice, and possibly prompt tour operators to charge the maximum level of service charge permissible.
The Council is of the view that tipping should not, in any way, be compulsory nor the amount be set in uniformity. It should be an incentive to better service and the amount to be individually decided by the consumers.
In the interest of price transparency to facilitate consumer comparison and fair competition, the Council has suggested that the tour price should include such elements as service charge and other surcharges, if any, to reflect the actual total sum to be paid, i.e. the total net price similar to ( ). This should be clearly stated on the price list.
Other highlights of findings of the user opinion and experience survey conducted on some 3,800 travellers returning from packaged tours at the Hong Kong International Airport following the Chinese New Year holidays, include :
- Tour cancellation or alteration
5% of the respondents had such experience, of which 40% were informed 14 days before departure while 60% had less than a fortnight to make the change. Compared with a similar survey five years ago, this situation has improved.
- Additional payments
0.9% of the respondents were asked for additional payments for various reasons, e.g. tour alteration, airfare increase, change of itinerary or transportation.
- Alteration of itinerary
This was common during the Chinese New Year holidays: notably, change of sightseeing programmes (5.9%), change of departure and/or returning time (3.3%), change of accommodation (1.2%).
- Optional programmes (excluded from tour price)
60% joined optional programmes arranged by tour operators in which an average of 40% of the activities were of a potentially hazardous nature such as skiing, water parachuting, scuba diving and rafting, etc. In most cases, consumers were advised of the potential risk involved.
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