Travel agents engaged in outbound travel services from Hong Kong are regulated under the Travel Agents Ordinance. The scope of the ordinance was expanded, upon the implementation of the Travel Agents (Amendment) Ordinance 2002 on November 1, to control and regulate travel agents providing inbound travel services to tourists. The aim of the ordinance is to minimise the occurrence of fraud and loss to travellers in the event of default of outbound travel agents, and to protect the interests of visitors by enhancing the service standards of inbound travel agents. The present regulatory system is made up of two components: a licensing system and a self-regulatory mechanism.

    The licensing function is carried out by the Registrar of Travel Agents appointed under the ordinance. All travel agents providing outbound or inbound travel services must be licensed under the ordinance. This requirement provides the first line of protection for travellers and visitors against default and malpractice. 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 1 304.

    The self-regulatory function is performed by the Travel Industry Council of Hong Kong (TIC), an approved organisation under the ordinance. 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 also collects statutory levies and handles 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 gauge 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 default by an outbound travel agent. The TICF is overseen by an independent management board, the Travel Industry Compensation Fund Management Board which has unofficial members drawn from different sectors of the community. The TICF 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 year-end, the TICF had a balance of about $340 million. No default on cessation of operation by outbound travel agents was reported in 2002.

    The TICF also operates a Package Tour Accident Contingency Fund Scheme. The scheme provides emergency financial relief in respect of outbound travellers injured or killed in accidents in the course of an activity arranged or organised by a Hong Kong travel agent. It covers medical expenses; funeral expenses, if applicable, incurred in the place of the accident or the costs of 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 the death. In 2002, 12 tour accidents — involving 17 fatalities, and 97 cases of injury — were reported, involving groups travelling outside Hong Kong. Payments under the scheme amounted to about $570,000.

    As a complement to the licensing of inbound travel agents, a training and certification system to ensure the service quality of serving tour guides has been developed. This system requires serving tour guides to attend specified training courses, pass an examination and obtain a certificate before they may work as tour guides. The training course commenced in July. It is anticipated that it will take about two years for some 8 000 serving tour guides to complete the training.

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