Travel agents providing outbound travel services departing from Hong
Kong and inbound travel services for visitors coming to Hong Kong are
regulated under the Travel Agents Ordinance. The aim of the ordinance
is to minimise the occurrence of fraud and loss to travellers in the event
of defaults by 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 by the trade.
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. Travel agents may also face
suspension or revocation of their licences if they are found to be operating
against the public interest. At year-end, the number of licensed travel
agents totalled 1 323.
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 TIC in order to obtain and hold a licence. The TIC sets
and enforces codes of conduct and issues directives from time to time
to regulate business operations. It also handles public complaints about
the services of its members. Members who breach the council's rules are
subject to disciplinary action.
A Travel Industry Compensation Fund (TICF) has been
set up under the ordinance to provide ex gratia compensation of
up to 90 per cent of the loss of tour fares to outbound travellers in
the event of a default by an outbound travel agent. 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 $366 million. During the
year, four cases of default on cessation of business by travel agents
occurred, affecting 528 travellers. The affected travellers received a
total of about $1.5 million in ex gratia compensation from the
The TICF also provides emergency financial assistance
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.
In 2003, four outbound tour group accidents (involving one fatality and
32 cases of injury) were reported. Payments under the scheme amounted
to about $43,000.
As a complement to the licensing of inbound travel
agents which took effect on November 1, 2002, a training and certification
system to ensure the service quality of serving tourist guides has been
developed by the trade. This system requires serving tourist guides to
attend specified training courses, pass an examination and obtain a Tourist
Guide Pass before they may work as tourist guides. With effect from July
1, 2004 all travel agents will be required to assign only those tourist
guides possessing a valid Tourist Guide Pass to receive visitors to Hong