Counting the hidden cost of cheap vacations
Updated: 2015-11-06 07:51
By Su Zhou and Kahon Chan(China Daily)
Visitors on 'negative-fee' tours of Hong Kong and Macao have been subjected to scams, 'forced shopping' and threats as agencies and storekeepers collude to boost profits, report Su Zhou in Beijing and Kahon Chan in Hong Kong.
Qiu Min had a sense of d��j�� vu when she read about a 53-year-old tourist from the mainland who was beaten to death on Oct 19 as he attempted to intervene in a dispute over "forced shopping" at a jewelry store in Hong Kong.
On Thursday, the store owner, a 59-year-old woman, was detained by customs officials on charges unrelated to the man's death after other customers complaint about coercion.
The news reminded Qin of a group tour she joined at the end of September, during which she and her fellow travelers to Hong Kong and Macao were pressured into purchasing unwanted items.
"I was nervous and worried throughout the trip. The tour group was like an army with a tight schedule, and the guide was a harsh commander. We had to do everything she told us, including shopping at places we didn't want to visit," said the 53-year-old former employee of a State-owned enterprise.
The Hunan province resident said she grudgingly accepted the "uncomfortable treatment" because the six-day package cost just 500 yuan ($79), and she didn't dare argue with the tour guide for fear of being abandoned in Hong Kong, which she had never visited before.
"Last time I quarreled with a tour guide was in Beijing in 2002. As a result, I was abandoned, and had to book a return train ticket myself. It was a horrible experience," she said. "In Hong Kong, I couldn't speak the language (Cantonese), and didn't know how to seek help from the police."
An industry insider on the mainland with long experience in outsourcing outbound tourism from a State-owned travel company, said cheap trips with "shopping traps" are common, especially those to Hong Kong, Macao and Yunnan province.
"Competition is very fierce, with too many travel providers trying to offer too many products, and some consumers just want the cheapest," said the man, who gave his surname as Chen.
"To attract as many tourists as possible, many travel agencies have to lower their prices and figure out their own ways to make ends meet, usually by accepting commissions for forcing tourists to shop," he added.
The results of an investigation conducted by the China Consumers Association and the China National Tourism Administration, and published on Oct 28, supported Chen's comments. "More than 74 percent of domestic travel routes have serious problems. In some southwestern and northeastern regions of the mainland, forced shopping is a prominent problem ... and many tour guides accept illegal commissions," it said.
In addition, an undercover investigation carried out by five authorities in Yunnan province during the week-long National Day holiday in October showed that travel agencies and stores make illegal profits by coercing tourists to buy overpriced souvenirs, while travel agencies rake in as much as 70 percent of the cash generated.
The tourist's death prompted widespread media coverage of tourist traps, including stories of mainlanders being detained in stores and malls until they had spent a prescribed amount.
Low costs, standards
Industry insiders said all cheap tours operate on a similar "negative-fee" model, in which tourists sign up for trips priced at far below cost.
Some tours are even offered gratis.
The burden of recovering the expense falls primarily on assigned tour guides, most of whom are unpaid and have to pay the agency for the "privilege" of leading a group.
In turn, the guides depend on commissions offered by stores designated on the tour itinerary to recover their advance payment and earn a living.
Many stores raise their prices to take advantage of tourists.
Wong Ka-ngai, a frontline tour guide who is chairman of the Hong Kong Tour Guides General Union, estimated that more than 90 percent of inbound mainland tours operate via this model.
In recent years, some mainland tour organizers have reportedly used their own guides, often disguised as tourists, to cajole fellow travelers to purchase items.
Local guides are also hired in accordance with local regulations, but as they don't force people to shop they are not entitled to any of the lucrative commissions.
Industry insiders said Hong Kong has strict rules to regulate negative-fee tour groups, but fierce competition forces travel providers to cooperate with organizers on the mainland.
Ricky Tse Kam-ting, chairman of the Hong Kong Inbound Tour Operators Association, explained: "The cost structure of negative-fee groups is determined by mainland organizers, and Hong Kong operators have to comply to survive the competition".
Joseph Tung Yiu-chung, executive director of the Hong Kong Travel Industry Council, said it's difficult for an industry-controlled body to tell the industry how to conduct itself.
"We've been telling them (operators) not to receive tours at such low fees, but they reply that they need the business to stay in operation," he said.
China's Law on Tourism strictly forbids graft and exploitation, stating specifically that "travel agencies cannot attract, organize or accept tourists with prices below cost; cannot designate shopping places; cannot force tourists to shop; and cannot arrange activities with hidden payments".
The tourism watchdog has cracked down on ultra-cheap tours by safeguarding the rights and interests of guides, urging travel agencies to abandon low-priced products and drafting industry standards for agencies.
A recent move even suggested that tourists should shoulder responsibility for signing up for obviously underpriced tours.
Tung said the Travel Industry Council must work harder to change the poor conduct of tour guides and prompt member companies to meet service targets.
However, group tours originating on the mainland, reliant on commissions to turn a profit, are out of reach, he said.
The council requires operators in Hong Kong who receive inbound tours to declare itineraries, hotels and group members' personal details, but the cost of the tour is not included on the checklist because it's impractical for a Hong Kong regulator to verify deals made with tour organizers on the mainland, according to Tung.
Ricky Tse, of the Hong Kong Inbound Tour Operators Association, said the market shapes the payment structure.
For example, although guides are offered HK$400 ($52) to HK$800 a day to supervise tours that originate in Vietnam and Indonesia, they shun them because Southeast Asian tourists spend much less than visitors from the Chinese mainland, meaning the guides earn less in commissions.
Agents in Hong Kong are wary of attracting complaints, so most groups are only taken to duty free stores that offer a commission of about 5 percent, because even one bad review from an unhappy tourist could easily result in the loss of a long-term business partner, according to Tse.
Tse said that unlike their peers in Hong Kong and other parts of Asia, mainland agencies are unconcerned about gaining bad reputations, and continue to partner with Hong Kong operators known for illegal tactics.
"They don't seem to care about complaints," he said.
Liu Simin, deputy secretary-general of the Beijing Tourism Association, said cheap and negative-cost tours remain popular because of an "unhealthy attitude" among tourists, who continue to prefer cheap choices.
"Travel agencies providing cheap tours are taking a big gamble, but so are the tourists," he said.
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(China Daily 11/06/2015 page6)