Malaysiakini Letter

Tour operators must be well versed with laws and contracts

YS Chan
Published:

All legitimate travel and tour companies operating in the country are registered with the Companies Commission of Malaysia and licensed by the Ministry of Tourism, Arts and Culture (Motac) under the Tour Operating Business and Travel Agency Business regulations.

Motac issues three main types of licences for these companies and they are for Inbound Tour Operating Business, Outbound Tour Operating Business and Travel Agency Business.

The inbound licence permits a company to operate tours within Malaysia for incoming tourists and those in the country, regardless of their nationality. The outbound licence authorises the company to organise tours to overseas destinations, including foreigners departing from Malaysia.

As travel agencies merely act as agents for principals such as airlines, hotels, transport and entertainment providers, and service contracts are largely between principals and travellers, exposures and liabilities to customers by travel agencies are rather limited.

On the other hand, tour operators are fully responsible for tours they organise and operate within the country or to overseas destinations, and they include transport arrangements, accommodation and meals, or any service stated in the tour itinerary or listed in the travel package.

As such, they ought to be aware and abide by the laws wherever their customers are travelling to. But most tour operators have a poor grasp of local laws and contracts governing travel businesses, and few are prepared to put aside a day to learn and apply the best practices in the industry.

If tour operators are compelled to attend a short programme, with one-and-a-half hours allocated for travel business law, then learning should be focused on areas that are most relevant and applicable to their business.

As laws and contracts cover a vast area, finding the right starting point is critical in ensuring all important areas are covered within a limited time, and none better than commencing from the moment a traveller pays for a tour package or travel arrangement.

Discussions should then be centred on whether the traveller was dealing with a licensed operator or not, and whether those licensed are providing fully licensed services or partially, and whether service contracts are legally binding or based on assumptions.

Although a verbal agreement can create a valid, legally binding contract without a written document, it should be avoided as it is easily forgotten or could lead to an argument if one party denies it. A short message sent over email or by phone is much better than none.

For the good of all parties, tour operators must have agreements and contracts ready to be signed with suppliers and customers. They must examine agreements or contracts drawn up by others, to ensure all signatories adhere to the terms and conditions, and not based on verbal understanding which is easily misunderstood.

Similarly, tour operators must be clear and in full compliance with the various laws governing travel businesses and not try to bend the rules for expediency, as these could easily lead to breaking them and therefore illegal.

This can be challenging when the authorities seem to go after the licensed businesses for the slightest of infringements but seem to continue giving unlicensed operators a free rein to continue their illegal business without paying for licences and taxes, and often cheating or short-changing customers.

Because of the huge number of illegal businesses operating online, it is not easy for the public to differentiate between licensed and unlicensed operators, more so when the giant online travel agents operating in cyberspace are not licensed in Malaysia or subject to local laws and taxes.

At the 34th Asean Summit Gala Dinner in Bangkok last Saturday, Prime Minister Dr Mahathir Mohammad told the Malaysian media that during the plenary session, he had proposed to Asean member nations to introduce taxes on online businesses.

Travellers who are fond of do-it-yourself arrangements are emboldened each time they completed a trip successfully without any hitch, but it would be a matter of time they hook up with an irresistible offer online and lose all their payments. It would be tragic if they brought a large group of people on board to take advantage of the "bargain" offer.

Apart from those who trawl the internet looking for bargains and inevitably get sucked in by one, other scams involve using a person many people trusts, such as Imams, who are nice and sincere people always willing to help others.

The favourite modus operandi of Umrah scammers would be gaining the confidence of people like Imams trusted by their congregations. A larger number of pilgrims would come on board if the initial dealings went smoothly and the scam would surface only after a substantial amount of money had been collected, and the cheats have long disappeared.

The public should realise they must always deal directly with licensed tour operators and ensure all services are also licensed when required, otherwise their safety or security could be compromised.

But if they choose to deal with unlicensed operators, they would have no recourse when they get cheated or short-changed as scammers are difficult to trace, unlike licensed operators that can be served a notice to appear at the Tribunal for Consumer Claims at a cost of only RM5.

As the tribunal tends to favour consumers, the chances are high in getting refunds or compensation for unsatisfactory services. Tour operators should be fully aware of such consumer protection and must do their utmost to make customers happy.

The tour business is highly challenging as many things can easily go wrong and beyond the control of the tour operator. For tour groups, they rely on highly competent tour leaders for outbound tours and tourist guides for inbound tours to manage tourists’ expectations.

Should something untoward happens, the survival of the tour operating business will depend on the execution of the contingency plan, if any, and the terms and conditions stated in the agreements or contracts.


The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

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