TRAVEL AND TOURISM
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occurrence of fraud, and loss to travellers in the event of default of travel agents. The present regulatory system is made up of two components: a licensing system and a self-regulatory mechanism.
A Registrar of Travel Agents is appointed under the ordinance to carry out the licensing function. All travel agents providing outbound travel services must be licensed under the ordinance. This requirement provides the first line of protection for consumers against default. It aims to enable the public to identify bona fide travel agents and to prevent undesirable persons from operating as travel agents. Under the ordinance, the Registrar may, after investigation, suspend or revoke the licence of a travel agent found to be operating against the public interest. At December 31, the number of licensed travel agents totalled 1 192.
The Travel Industry Council of Hong Kong (TIC) is the self-regulatory body for the travel industry. The ordinance requires travel agents to become, and remain, members of the council in order to obtain and hold a licence. TIC membership carries conditions, such as minimum requirements for capital, number and experience of staff, and office premises. The TIC sets and enforces codes of conduct to regulate business operations in such areas as advertising and business practices. It is also responsible for collecting statutory levies and handling public complaints about services of its members. Members who breach the rules of the council are subject to disciplinary action, including losing their membership.
To collect public views on the regulatory regime, the ordinance provides for the establishment of the Advisory Committee on Travel Agents (ACTA). This committee is chaired by a non-official independent of the travel industry, and its non-official members are drawn from different walks of life. The ACTA regularly reviews the regulatory regime and recommends improvement measures when needed.
In addition, a Travel Industry Compensation Fund (TICF) has been set up under the ordinance to provide financial protection for participants in outbound package tours. It provides ex gratia compensation of up to 90 per cent of the loss of tour fares in the event of a travel agent default. The fund is overseen by an independent management board and derives its income from contributions from licensed travel agents in the form of a levy on outbound package tours and from investments and bank interest. At the end of 2001, the TICF was holding a balance of about $330 million. During the year, there was one case of default on cessation of operation by a travel agent, affecting about 287 travellers. These travellers received ex gratia compensation of $694,000 from the fund, in total.
The TICF also operates a Package Tour Accident Contingency Fund Scheme. The scheme provides emergency financial relief concerning outbound travellers injured or killed in accidents while touring abroad. It covers medical expenses, and funeral expenses if applicable, incurred in the place of the accident; costs for repatriating the remains of a deceased person to Hong Kong; and expenses incurred by relatives of injured or deceased persons for travelling to the place of the accident or to Hong Kong for compassionate visits or dealing with residual matters relating to a death. In 2001, 12 tour accidents involving 10 fatalities, seven people missing and 123 cases of injury — were reported. Payments under the scheme amounted to about $330,000. To enhance the service standards for inbound travel agents and Hong Kong's reputation as a tourist-friendly city, the Government introduced the Travel Agents (Amendment) Bill 2001 into the Legislative Council in July. This is aimed at putting