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New law to jack up packaged tour prices
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Shanghai resident Lu Jing, who is planning a trip to Thailand in mid-October, was surprised to learn she had to pay 1,000 yuan (US$161) more per person just because she hesitated over the exact date of departure a few days too long.
In late August, she found a 10-day packaged tour to Thailand on Ctrip.com, China’s largest online travel agency, priced at 8,000 yuan per person. Since her daughter had not formalized her annual leave, Lu did not book immediately. Four days later, when she went to make reservations, the cost had gone up to 9,000 yuan.
China’s packaged tourism is riddled with anomalies. A new law set to take effect in October aims to clean up the industry by forcing out illegal operators, ending price irregularities and arbitrary route changes and ensuring that consumers aren’t forced to shell out more than the upfront costs they signed up for. But even before it takes effect, the law is generating controversy. Some fear it will push up the price of packaged tours.
Many Chinese prefer to travel in groups overseas because of the difficulties of language and the trouble arranging transport, hotels, restaurants and scenic destinations on their own. All too often, the trip of their dreams becomes a nightmare. Some tours steer customers to overpriced shops paying kickback or coerce tourists to pay for extra activities. Some travel agencies lure customers with below-cost tour prices, then make up the difference by forcing tourists to purchase goods or tip agents during the trip. In other cases, agencies fleece customers by promising four- or five-star hotels, then dumping them in dingier accommodation.
The law bans forced purchases of products, “zero or negative-fare tours,” and extra activities not on the itinerary. It will be a sting for agencies and tour guides who rely on kickbacks and rebates from shopping spots and from extra charges for unscheduled activities.
Travel agencies and tour guides face fines or license revocations if they are found in violation of the law.
As a result of the looming crackdown, prices of tour packages are rising 20-30 percent on average, and as high as 50 percent at agencies heavily dependent on kickbacks.
A packaged trip to Cambodia during the National Day holiday week in October is priced at 9,000 yuan, up at least 30 percent. A tour to Taiwan has risen a third, and a 14-day coast-to-coast tour in the United States shot up to 32,800 yuan from 20,400 yuan.
Mediating disputes
One Shanghai resident complained that she booked a 19,200-yuan November tour to Phuket in July and then was asked to pay more in late August. She refused, citing the terms of the travel contract, and complained to the Shanghai Tourism Quality Supervision Center.
Another resident said she paid a 2,000-yuan upfront fee in August to secure a reservation on a 10-day tour to France and Switzerland through the Shanghai branch of tuniu.com, one of the major travel websites in China. Four days later, she was told the cost had gone up to 36,000 yuan from 31,000 yuan because of the new law. She also filed a complaint with the tourism quality center.
The center said the common practice is to mediate such disputes, which have risen significantly in number since the law was announced.
Liu Xin, deputy general manager of the Shanghai China CYTS Outbound Travel Service Co, said agencies are moving toward more tailored tours, such as packages designed for wealthy, young families. Prices of tour packages are going up an average of 20-30 percent, Liu said.
Wang Jue, manager of the Xizang Road outlet of Spring Tour, said about half of people she hears from don’t care about rising prices, while the other half are hesitating or cutting travel plans.
The new law has been a big boon to the Mid-Autumn Festival from September 19-21, with many people deciding to travel ahead of the law’s effective date. Travel agencies have reported a 30-50 percent increase in bookings for the festival, compared with last year.
The law isn’t perfect, experts warned. "It wasn’t well researched and it’s not very down-to-earth,” said Hou Zhigang, associate professor of tourism at Fudan University. “I wonder whether it will play a serious role in regulating the market."
The law could end up being a paper tiger if authorities give it lax supervision because it’s disrupting the tourism industry too much.
Some travel agencies are already scouring the new law for loopholes, Hou added.
There may be one benefit of the law in terms of personal adventure. More people may be willing to strike out on their own by planning individual trips, he said.
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