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The Travel Industry Council consider that the AMPP scheme is beneficial rather than detrimental to consumers. Competition in the outbound travel industry, especially the short-haul market, is extremely fierce. Both the number of travel agents and the volume of business are higher than those in the long-haul market. Hence the impact on consumers in case of travel agency default or abscondment will be significantly higher. With the setting of minimum prices, healthy price competition is still engendered but not to the extent of non-commercially viable pricing. In addition, some of the emphasis of competition will be placed on the quality of service, such as inclusion of sight-seeing spots or extra programmes, which is beneficial to consumers.
The second part of question (b) and question (c) asks whether the AMPP scheme operated by the Travel Industry Council is in breach of the principle of fair competition. We consider that the AMPP scheme is conducive to maintaining a healthy business environment. With the scheme, travel agents do not need to fear the practice of commercially non-viable pricing in order to corner the market. Consumers face less risk of financial loss resulting from default or abscondment by travel agencies and less unhappiness resulting from cancellation of tours. With the AMPP scheme, travel agents still compete on pricing but above the minimum threshold. And they pay more attention to, and compete, on quality of service and content of tour programmes.
We are fully aware of the need to strike a right balance between reducing the risks of intentional underpricing operation by travel agents with all its consequential negative implications for consumers on the one hand, and ensuring that outbound travellers are not required to pay unreasonably high prices on the other. So far, the AMPP scheme operated by the Travel Industry Council has not caused great concern to the Government. Nevertheless, we will continue to keep the AMPP scheme operated by the Travel Industry Council under review. We work closely with the Council and the Council is receptive to suggestions from the Government. In addition, we will continue our long-established practice of consulting the Advisory Committee on Travel Agents, on which the Consumer Council is represented, as well as the LegCo Panel on Trade and Industry on matters relating to the outbound travel industry and the protection of outbound travellers.
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