Travel agents

Errant tour operators face tougher penalties

Errant travel agencies that close down, leaving customers in the lurch, will find it harder to reopen under a different name, after changes to the laws governing the travel industry.

In deciding whether to issue licences to travel agencies, the Singapore Tourism Board (STB) will consider factors such as whether company directors and other individuals involved with the company "are suitable to hold the licence", said Senior Minister of State for Trade and Industry Sim Ann yesterday.

Those who have previously contravened travel agent legislation might be denied licences, she added.

This comes as the Travel Agents (Amendment) Bill was passed in Parliament yesterday, marking the first update to the industry regulations in a decade.

The changes, which will be implemented in phases from January, will beef up consumer protection while relaxing some requirements to foster innovation in the industry.

Under the changes, STB will have enhanced investigation and enforcement powers.

There will also be harsher penalties for offences; for instance, the maximum fine for unlicensed travel agent activities has been raised from $10,000 to $25,000.

Travel agents that have had their licences suspended or revoked will also be required to disclose this to customers.

Other changes are aimed at making it easier for travel companies to conduct business. For instance, a tiered licensing regime will be introduced to lower costs for agencies offering day tours here, including those offering bike and walking tours.

These agents will be able to apply for a "niche licence" that requires less paid-up capital and net worth, or even may not need a licence altogether, depending on factors such as whether they provide dedicated transport and accommodation.

Ms Sim said such agencies pose a much lower risk to consumers as they often do not require pre-payments. She added: "We hope that this exemption will encourage more entities to offer consumers innovative and experiential tours, and in turn add to the vibrancy of our tourism landscape."

Mr Lim Biow Chuan (Mountbatten) and Mr Louis Ng (Nee Soon GRC), who were among four MPs who spoke in support of the Bill, asked if the Government would consider requiring travel agencies to post a performance bond, or finance a fund, which could be used to reimburse consumers in the event of closure.

Responding, Ms Sim said only a minority of the 1,200 licensed travel agents here are black sheep, and such measures would increase business costs across the board.

She said travel agents will be required to inform consumers of their option to purchase travel insurance that protects against travel agent insolvency.

She added that most agencies close down voluntarily, and only after fulfilling their contractual obligations. Between 2012 and this year, there have been only 10 sudden closures, she said.

A version of this article appeared in the print edition of The Straits Times on November 08, 2017, with the headline 'Errant tour operators face tougher penalties'. Subscribe