A recent survey found more travel agents bundled the package tours and compulsory travel insurance as compared to past survey.
The Consumer Council found that out of the 18 travel agents responded to its survey, 6 (33%) adopted the sale practice of bundling package tour with their designated travel insurance. In a similar survey conducted in 2009, only 4 travel agents (24% out of 17 travel agents) found to use such trade practice.
In the latest study, the Council staff visited 20 travel agents as ordinary consumers to collect relevant information on 3 selected package tours - Guangdong Chimelong 2-day tour, Beijing 5-day tour, Bangkok and Pattaya 5-day tour. Follow up enquires were made to the 20 travel agents surveyed but only 18 of them provided the information requested.
Of the 6 travel agents in question, 3 required the compulsory purchase of the designated travel insurance in joining the above tours even though the customers were already covered by their own annual travel insurance.
Consumers would not be accepted to join the tours if they refused to purchase the travel insurance.
1 of the above mentioned travel agents required customers to purchase designated travel insurance with all their tours. Its sales staff explained that the operator was using the profit from selling travel insurance to compensate the low tour fee.
Another one required customers to purchase designated travel insurance when joining tours at Member's price.
3 other travel agents required consumers to purchase designated travel insurance when joining some other tours, including Japan tour, designated bus tour or Express Rail Link tour (e.g. Guangdong / Guangxi bus tour, Hunan / Hubei Express Rail Link tour), tour outside of Guangdong province, designated Taipei or Thailand tour.
The survey also covered the premium payable for plans procured through travel agents requiring the compulsory purchase of travel insurance in comparison with those available at other travel agents.
For a 2-day Guangdong Chimelong trip, the premium of compulsory insurance ranged from HK$49 to HK$54, compared with HK$23 to HK$54 offered by other travel agents.
For a 5-day trip to Beijing, the premium are HK$212 and HK$199 (both global plans), compared with HK$87 (China and Macau plan) to HK$206 (global plan).
The Council is of the view that bundled sale practice would hinder the consumers in exercising their choice in selecting an insurance plan that best suits their needs.
Moreover, requiring consumers already covered by their own annual travel insurance to purchase an additional policy is not in their benefit.
In its reply to the Council's enquiry about the policy of bundled sale practice, the Travel Industry Council of Hong Kong (TIC) said it did not have any specific guideline or code of practice on this issue. If travel agents required tour participants to take out comprehensive travel insurance, they should clearly notify the tour participants of such a requirement before accepting their bookings. Moreover, the Outbound Committee of TIC considers it undesirable for travel agents to require tour participants to purchase another travel insurance if the potential participants are already covered by their own travel insurance.
According to the Office of the Commissioner of Insurance, travel insurance is not mandatory in Hong Kong. Neither the Insurance Companies Ordinance nor the Code of Practice for the Administration of Insurance Agents issued by the Hong Kong Federation of Insurers restrict the way travel agents sell travel insurance. Hence, they consider the bundled sale of tours and travel insurance a matter of tour operations which is more appropriately to be dealt with by the authority regulating travel agent operations.
The Council is concerned that if such a practice becomes prevalent in the travel industry, consumers will gradually lose their genuine right to choose.
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