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TRAVEL AND TOURISM
HONG KONG'S outbound travel business is operated by some 1000 travel agents who are licensed by the Registrar of Travel Agents under the Travel Agents Ordinance. The ordinance provides the statutory framework for regulation of the outbound travel industry. In order to be licensed, a travel agent must be a member of the Travel Industry Council of Hong Kong.
The council is an approved organisation of travel agents in Hong Kong. It comprises seven association members: Hong Kong Association of Travel Agents Limited; Federation of Hong Kong Travellers Limited; International Chinese Tourist Association Limited; Society of International Air Transport Association Passenger Agents Limited; Hong Kong Taiwan Tourist Operators Association Limited; Hong Kong Association of China Travel Organisers Limited; and Hong Kong Outbound Tour Operators' Association Limited. The council regulates member travel agents by means of codes of practice and occasional directives. Members who breach the rules of self-regulation risk losing their council membership and their licence to operate.
Outbound travellers on tours are covered by a scheme that offers a high degree of protection. Formerly, a one per cent levy was raised on all outbound tour fares to make up the Travel Industry Council Reserve Fund, which was established in 1988. If a licensed travel agent should collapse, outbound travellers might claim compensation from this fund for up to 70 per cent of tour fares paid. A recent review of the regulatory scheme recommended a reform package which included a split of the levy into two: a 0.15 per cent levy for the council in recognition of its self-regulatory efforts and a 0.85 per cent levy for the reserve fund for compensating aggrieved travellers. In addition, the review recommended that when the reserve fund had accumulated $100 million, the compensation rate to eligible outbound travellers would be revised upwards to 80 per cent of tour fares paid and the levy for the reserve fund would be reduced to 0.35 per cent. Whenever the reserve fund fell below $70 million, the levy for the reserve fund would be increased to 0.85 per cent and would stay at this level until the fund reached $100 million again. The review also recommended the reconstitution of the fund into an independent statutory body to enhance its public accountability and transparency. Part of the reform package has been implemented. Full implementation of the package shall await enactment of the Travel Agents (Amendment) Bill 1992 which was introduced into the Legislative Council on October 14, 1992.
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