Crackdown on Illegal Tour Agents in Thailand

[tweetable]Thailand’s Ministry of Tourism and Sports has been cracking down on illegal travel agencies[/tweetable] that are operating in the country without having registered with authorities. The unauthorised firms, who operate without licences as a means of cutting costs, face the possible threat of substantial fines or even imprisonment if caught.

The authorities’ inquest is believed to have uncovered 88 illegal tour guides, consisting of 42 Thais and 46 foreigners, as well as 39 unlicensed tour operators. Another 23 tour operators have had their licenses suspended and another 6 saw theirs revoked as punishment for conducting business unlawfully.

A particular issue for the Thai tourism sector has been the operation of low-quality businesses by foreigners via the medium of a local Thai nominee. As part of the wider tourism clampdown, a total of 79 travel agencies were investigated for having purportedly been operated by foreigners, in violation of a law which requires travel companies to be a minimum 51% Thai-owned. Nevertheless, only 6 of these firms were found by the Business Development Department to have been illegally making use of nominees.

This also led to a sting last week in tourist hotspot Chiang Mai last week, in which five shops and a resort suspected of operated by foreigners through Thai nominees were raided by police after having been accused of selling overpriced and poor-quality goods to predominantly Chinese tourists. Such actions are taken seriously by the Thai authorities as a means of upholding not only the country’s domestic businesses, but also its wider reputation as a tourist destination in the eyes of foreigners.

The sale of such overpriced goods is closely-linked to the phenomenon of so-called zero-dollar tours, which have become particular prevalent amongst Chinese package travellers. Such holiday packages are typically sold to customers at a loss at highly attractive prices, yet profits are recuperated by commission-driven tour guides who force customers to purchase overpriced souvenirs in such foreign-linked businesses.

While the practice of zero-dollar tours has already been largely eradicated in destinations such as Hong Kong and Australia, it is still a prominent issue in Thailand and the Chinese Embassy in Bangkok has been working with domestic authorities to stamp out the practice. Although successful clampdowns on zero-dollar tours have been known to harm absolute arrival numbers of Chinese visitors, tourist receipts may nevertheless rise as often higher-yield travellers spend their money with authorised tourism providers and profits remain largely within the destination country. Furthermore, in the absence of often chaotic forced shopping practices, these countries are better able to protect their reputations as high-quality tourism destinations, a key motivation factor for the Thai tourism sector.

COTRI China Outbound Tourism Research Institute provides expert insights into the worldwide developments of China’s outbound tourism market. As Chinese outbound tourists are travelling to a large range of destinations, our publications cover a number of different regions. Important Chinese visitor activities are analysed, and detailed insights are presented.

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Sources: The Phuket News, Bangkok Post

Photo: flickr