Including service charges in package costs could hit incomes Tour guides may suffer a pay cut if tour prices are readjusted to include service charges under a proposal by the Consumer Council, a representative group has warned. The council's proposal was made last week to assist product comparison. It pointed out the lack of price transparency when some travel agents used low tour prices to entice consumers but subsidised the costs with compulsory high service charges. A five-day tour to Thailand can cost as little as $1,100 but the required 'tips' could range from $500 to $550, or 50 per cent of the tour price. The Travel Industry Council is studying the feasibility of the proposal. It now sets only maximum service charges for the guides. Hong Kong Association of Registered Tour Co-ordinators chairman Wong Wai-wing was concerned guides' income could drop if the tips were factored into the price. While income varied among individuals, he said, those guiding mainland tours had no basic salaries due to the keen competition in China. For other tour guides, the basic salary was about $500 to $600 a day. 'Tour guides' major source of income still comes from service charges collected after the tour. They can also get some extra income from shopping activities,' he said. 'The amount of tips varies according to service quality and it gives motivation to guides. There is a chance that they can earn a good sum.' He said travel agencies, who collected the tour fees, could be returning less to the guides. 'The amount of income will then be fixed because it is no longer performance-related,' he said. 'We would propose the introduction of a basic salary for guides.' Ng Cheuk-fan, managing director of Satellite Tours and chairman of Outbound Tours Association, pointed out that the current practice was already in the spirit of free market competition. 'The phenomenon emerged because we no longer had a minimum set on tour prices. But the removal of a price floor has introduced free competition. It is inevitable that agencies are using low prices to entice customers,' he said. He insisted that the earnings of tour guides would not be affected under the new proposal because their pay was market-determined.