Following the launch last month of a NT$300 million (US$9.41 million) fund to subsidize the tourism sector, the Cabinet yesterday said that it would withdraw subsidies for travel operators offering “zero-dollar tour packages.”
The NT$300 million fund announced on Nov. 4 is aimed at helping firms that have seen business drop following a decline in the number of Chinese tour groups transition into offering packages aimed at local travelers.
Under the measure, each travel agency can receive a maximum of NT$45,000 for each tour aimed at local travelers that they operate, including up to NT$300 per day for food, up to NT$600 per day for accommodation and half of the transportation fees for each tourist.
However, Taipei-based tour company Volvo Travel Service Co was offering daily tours almost free of charge, the Tourism Bureau said, seemingly profiting from pocketing the subsidy and charging commission from sites and stores on the travel itinerary, the Tourism Bureau said.
The tours were reportedly fully booked and in high demand, the bureau said, adding that they threatened to disrupt the price mechanism of the tour industry.
The Cabinet is considering withdrawing subsidies for operators selling such packages, Executive Yuan spokesman Hsu Kuo-yung (徐國勇) said.
“The objective [of the subsidy] is to revitalize domestic tourism and associated sectors, and zero-dollar tours contradict that objective. We do not rule out canceling the subsidy for such operators,” Hsu said.
The Tourism Bureau yesterday said that it is asking Volvo Travel to change its advertisement for domestic tours, after it was found to be touting unreasonably low tour fees, adding that the travel agency would be disqualified from applying for the subsidy.
The agency’s advertisements indicated that the firm was qualified to receive a government subsidy, and therefore tour members only needed to contribute NT$50 travel insurance toward the cost of a ticket.
Bureau Director-General Chou Yung-hui (周永暉) said that the subsidy is intended to reduce the impact of a decrease in Chinese tourists, adding that domestic tour operators are reimbursed according to a framework approved by the Ministry of Transportation and Communications.
Some travel agencies intended to attract customers by advertising zero or unreasonably low prices, attempting to extract profits by offering group members shopping tours or other additional extras for which they are charged, Chou said, adding that this practice reduces the quality of the experiences on offer and harms tourists’ interests.
A reasonable price for a one-day tour is between NT$1,000 and NT$2,000, the bureau said.
“There is no such thing as a free lunch. Travel agencies might want to offer quality tours with low prices, but they cannot resort to trickery,” he said.
It is still investigating if Volvo Travel has contravened regulations, adding that it would be fined between NT$10,000 and NT$50,000 if it is determined to have violated the Act for the Development of Tourism (發展觀光條例), the bureau said.
The bureau said it could also order the agency to suspend its business and revoke its license if it has committed a severe violation.
Volvo Travel is the first travel agency to be disqualified from applying for the subsidy.
So far, about 24.5 percent of the funding available has been allocated to agencies offering domestic tours, the bureau said.
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