The government will cancel subsidies to tour agencies serving the domestic market if they are found to offer customers “zero dollar” tour packages, Cabinet spokesman Hsu Kuo-yung (徐國勇) said on Thursday.
Hsu said such tour packages run counter to the intent of the government’s subsidy program, which was introduced to address the difficulties faced by local travel agencies in the wake of a fall off in the number of travelers from mainland China.
Last month the government announced it would provide subsidies worth NT$300 million (US$9.54 million) to businesses in the tourism sector that have suffered losses due to the steep decline in the number of Chinese tour groups and help them to produce tour packages aimed at local travelers.
However, since the subsidy program was launched, some of the target tour operators have reportedly been offering customers “free-of-charge” tour packages for those in tour groups, to boost the amount of subsidy to which the company is entitled.
A “free-of-charge” tour group, also called a “zero dollar group,” refers to a group in which participants pay little or nothing to participate. To make up the cost of organizing such tour groups, the travel agencies also take customers shopping at stores from which they receive a payment.
These tour packages have been criticized for their general low quality and the damage they are causing to the travel sector through unfair low-price competition.
The Tourist Bureau confirmed that it has recently received reports from tour agencies about operators promoting domestic tour packages that require no tour fees to boost customer numbers.
This business strategy may violate travel industry regulations if it is determined to be unfair competition or involve inaccurate and false advertising, the bureau said, indicating it has launched an investigation into the matter.
At a press conference after a Cabinet meeting, Hsu said it was regrettable that some travel agencies are generating profits through the government subsidy and commissions from store owners.
The NT$300 million subsidy program is aimed at helping the travel service sector recover from the decline in Chinese tour groups and encouraging them to focus more on Taiwanese travelers, Hsu explained.
If any tour agency violates the spirit of the program, the government does not discount canceling the subsidies, Hsu said.
Under the subsidy program, travel agencies currently receive NT$300 for food, NT$600 for accommodation and half of transportation costs per day for each traveler.
Travel agencies receive a maximum of NT$45,000 per tour group. An additional maximum of NT$10,000 is available if they hire a Mandarin-speaking tour guide to accompany the group.
According to Tourism Bureau statistics, the number of Chinese visitor arrivals in Taiwan in October was 44.3 percent lower than the same month last year.
Meanwhile, National Immigration Agency (NIA) figures indicate that the number of Chinese visitor arrivals in Taiwan from Oct. 1-18 was 47.8 percent lower than in the same period last year, with the number of tour group tourists dropping by 70.6 percent year-on-year.
From May 20, when the Democratic Progressive Party took power, to September, Chinese tourist arrivals declined 27.2 percent year-on-year, with the number in tour groups falling 44 percent, according to the NIA figures.
Source: Focus Taiwan News Channel