Democrats' bid to boost travel compensation

PUBLISHED : Monday, 23 September, 1996, 12:00am
UPDATED : Monday, 23 September, 1996, 12:00am

A campaign is underway to step up help for holidaymakers hit by the sudden closure of travel agents.

Democratic Party legislators Li Wah-ming and Sin Chung-kai are to introduce a private member's bill calling for the compensation rate for customers to be boosted from 80 to 100 per cent.

The pair also want improved cover for travellers who suffer accidents while on holiday.

Mr Li said the Travel Industry Council's reserve funds - now standing at $200 million - were sufficient to compensate victims in full.

The move follows complaints from customers who have called for a central pool to ensure immediate and full refunds when agencies collapse.

This year could see a record number of travel agencies leaving the market.

Travel Agents' Registry figures show 90 agencies folded between January and August this year, compared with 84 for the whole of last year and 98 in 1994.

The figures for 1992 and 1993 were 62 and 61 respectively.

Hong Kong Association for Tourists' Rights chairman Chow Yick-hay said travellers were the least protected if agencies collapsed.

'The best scenario is that they can get back 80 per cent of the money they lose - but only after lengthy procedure,' he said.

'Travel agencies should be required to deposit all travellers' payments into a fund to be monitored by the travel industry.

'In case of a closure, money should be withdrawn from the fund immediately to refund travellers.' Fears have increased after reports that a well-established agency specialising in Far East tours could fold next month because of poor business prospects.

The agency's licence is due to be renewed in two weeks but it has not submitted financial reports to the Travel Agents' Registry to complete its application.

Acting Registrar of Travel Agents Isabella Ip said an agency's financial situation, auditor's report, its management's report of its business and quality of service would be factors determining whether to renew a licence.

In April, adventure tour expert Mera Travel folded, followed by the sudden collapse of Observers Travel in June.

Mr Chow argued: 'At present, agencies are free to use the clients' money to invest in stock or the property market or whatever. If they fail, there is little their clients can do.' Legislator Howard Young, who represents the tourism industry, said agencies had been hard hit by rocketing office rents and workers' salaries.