Chinese ban on 'forced shopping' trips adds to costs for tourists

Ban on 'forced shopping' trips means agencies must pay guides more

PUBLISHED : Wednesday, 02 October, 2013, 12:00am
UPDATED : Wednesday, 02 October, 2013, 4:03pm

A new mainland law that bans "forced shopping" has prompted sharp rises in prices for outbound tours.

A five-day tour to South Korea organised by the China International Travel Service a year ago cost 4,000 yuan. This year the price is more than 7,000 yuan (HK$8,800).

The law, which took effect at the start of the seven-day National Day "golden week" holiday, substantially raises tourist agency costs, especially the salaries for tour guides, who formerly got commissions for herding tour groups into designated shops.

Hong Kong and Thailand are among destinations that have seen the biggest price rises, with the cost of tours to the latter more than doubling, several mainland agencies said.

As a result, sales of such tours have fallen, even at what is a peak period for holidays.

There has been an outcry on the mainland in recent years about extremely cheap tours tied to forced shopping.

The new law decrees that "travel agencies shall not arrange tours and attract tourists by unreasonably low prices".

Agencies and tour guides are prohibited from arranging for tourists to visit specific shops, or organising other activities that tourists have to pay for on top of the tour fee.

Li Shuang , deputy general manager of BTG Outbound Tours, said his company had raised the prices of all its tours. "A pay rise for our tour guides is a major factor in the increased costs," he said. "Before, they could get a lot of commission from shopping and optional activities."

Tour bookings for this "golden week" had dropped by 40 per cent compared with the same period last year, he said.

Diao Shuang , a deputy manager at the China Youth Travel Service, said business for his firm had also been affected.

Media reports had given substantial coverage to the law, the first dealing with tourism, and many people were adopting a wait-and-see attitude, he said.

He said his company would normally see a 10 to 15 per cent rise in outbound tours this week, but numbers had stayed flat last year.

Despite the price rises, consumers were not actually spending more on such tours, said Shi Yu, an experienced guide in Beijing who has taken tourists to a variety of countries.

"The price rise actually just covers the loss of tips and extra charges for optional activities which we used to have," she explained. "For consumers, the only difference is that they used to spend the money during the tour, and now it's included in the tour fare."

Dun Jidong , a sales manager in the tourism department at Ctrip, China's leading online travel-service provider, said that the new law was a good opportunity for travel agencies to return to a more benign competitive environment.

"In the past, we simply competed for low prices. Now, serious players in this industry should do something about innovating their products and services," he said.

China's middle classes are spending a growing portion of their cash on travel. Official data showed that tourists made more than 80 million cross-border trips last year, up 15 per cent from a year earlier.

China has also become the biggest driver of growth in international tourism, said the World Tourism Organisation.