The Travel Quality Assurance Association yesterday estimated that about 500 travel agencies would be forced to suspend operations in the first half of this year due to the COVID-19 outbreak.
The association, whose members include more than 3,926 travel agencies, said that almost all of its members would be forced to temporarily stop businesses should the outbreak continue into the second half.
The first six months is usually the high season for tours to Japan, as Taiwan has the Lunar New Year holiday in January and three long weekends — 228 Peace Memorial Day last month, Tomb Sweeping Day in April and Dragon Boat Festival in June — association secretary-general Wu Mei-hui (吳美惠) said, adding that Japan’s cherry blossom season began this month.
Photo: Chuang Shih-hsien, Taipei Times
Many travel agencies are already facing severe challenges caused by declining revenue due to the outbreak, Wu said.
What makes the situation worse is that service suppliers that work with travel agencies confiscate deposits paid on behalf of tourists, Wu said, adding that this makes funding shortfalls arise more swiftly.
“Our conservative estimate is that more than 500 travel agencies would temporarily cease business in the first half,” she said. “At least 1,500 travel agencies might be forced to place their employees on furlough. Should the disease persist until the second half, more than 90 percent of travel agencies across the nation would temporarily suspend operations.”
The disease has prompted more than 2,000 complaints to the association last month over how travel agencies have handled tour cancelations, which is more than it normally receives in a year, she said.
Normally, the association handles 1,200 to 1,300 consumer complaints per year, Wu said.
Most of the complaints were over cancelations of tours to Japan and Europe, she said.
The Central Epidemic Command Center (CECC) has announced a level 2 “alert” for Japan, urging people to take enhanced precautions when traveling there.
Apart from Italy, which is under a level 3 “warning,” the CECC has not listed European nations as affected by COVID-19.
The Ministry of Foreign Affairs has raised its travel alert to Hokkaido in Japan to “orange,” meaning that people should avoid unnecessary travel there.
Wu said that people are still concerned about traveling overseas, even to a non COVID-19-affected area, as they fear the risk of contracting the virus in closed environments, such as aircraft and buses.
The main reason for complaints is that people think that fees for canceled tours are too high, Wu said, adding that 70 percent of cases were over dissatisfaction with flight ticket refunds.
“If the airlines refuse refunds, fees for canceling tours would inevitably be high. This upsets people, who file complaints with the association or the Consumer Protection Committee, or even seek assistance from legislators representing their electoral districts,” Wu said.
The total amount in dispute from fees due to canceled tours could exceed NT$10 billion (US$331.96 million) by the end of June, she said.
The disputes put many travel agencies in a bind, she said.
Based on the standardized travel contract, consumers must be given receipts if they are asked to pay fees.
However, some airlines, particularly those operating flights to Japan, refuse to produce receipts and if the consumer refuses to pay, travel agencies are forced to cover this expenses themselves, she said.
Other tour service providers are also adamant that deposits would not be refunded, even though consumers are pressing the travel agencies to give full refunds, Wu said.
“The Ministry of Transportation and Communications should discuss how travel agents, airlines and hotels should handle the situation,” Wu said. “It should establish the standards for refunds and make procedures transparent.”
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