Scandals turn China shoppers off
Hong Kong By Olivia Chung
HONG KONG - Tourism is a major pillar of
Hong Kong's economy. Tourists from mainland China
have made the largest number of visits to this
former British colony in recent years. During each
of the mainland's three "golden week" holidays on
Chinese New Year, Labor Day (May 1) and National
Day (October 1), hundreds of thousands of mainland
tourists flock to the territory for sightseeing
and shopping.
However, Hong Kong's tourism
authority and tour operators are now afraid that
the number of group tourists may drop by 30%
during the upcoming May Day "golden week" holiday
because of
the
negative impact of recent scandals involving
unscrupulous Hong Kong shops selling mainland
tourists fake brand-name goods at excessive
prices.
The shopping scams were first
exposed by China Central Television (CCTV) in an
investigative report on April 1. The report
prompted scores of mainland visitors to return to
Hong Kong to file complaints and demand refunds.
Hong Kong customs officers raided the shops
involved and the police made arrests.
Hong
Kong Inbound Tour Operators Association president
Charles Ng said the shopping scams damaged not
only the city's reputation as a "shoppers'
paradise" but also the entire tourism industry. He
predicted that the number of mainland group
tourists would be only 70,000 on the May Day
holiday, down 30% from the same period last year.
The number of individual visitors from the
mainland is also expected to drop. Hong Kong
Tourism Board chairman James Tien expects a drop
of about 10% in the total number of mainland
tourists visiting the city during the May Day
"golden week".
Tourism is one of the four
pillars of Hong Kong's economy - the others being
finance, logistics and trade - bringing in
billions of dollars a year. Sales from retail
outlets make up a large part.
According to
the tourism board's statistics, 25.25 million
visitors came to Hong Kong last year, spending a
record HK$119.43 billion (US$15.31 billion), up
12.7% from 2005. The average per capita spending
of overnight visitors grew by 2.9% to HK$4,799,
the board said. Same-day visitors' spending
increased dramatically by 25.3% from an average
HK$810 in 2005 to HK$1,015 last year. The board
attributed the strong growth in one-day visitors'
spending to mainland consumers.
The board
said visitor arrivals in February rose to a new
monthly high of more than 2.28 million, because of
the mainland market. Visitors from the mainland
made up 64.8% of arrivals in February.
Given the importance of tourism to Hong
Kong's economic growth, it has been trying hard to
lure tourists by establishing new attractions and
promoting the Honest and Quality Hong Kong Tour
and the Quality Tourism schemes.
While
fake products abound across the border, Hong Kong
has become a favored shopping place for mainland
visitors because of the rigorous measures taken to
keep out fakes. However, the CCTV report about
mainland tourists being conned in Hong Kong has
damaged the city's reputation as "shoppers'
paradise".
A tourist from Sichuan said at
Golden Bauhinia Square in the city's Wan Chai
district that he used to think of Hong Kong as a
counterfeit-free place, "but I don't believe it
anymore after watching the program".
A
Shanghai tourist said all group tour members were
taken to designated shops and asked to buy goods.
"Sometimes our tour guide gave us a long face if
we didn't buy anything. As the authenticity of
items is difficult to determine, I bought some
cheaper things in the shops," she said.
Some industry experts blamed the industry
malpractice on the "zero-fee tours" for
mainlanders. For such tours, travel agencies and
tour guides would not charge tourists fees and
would take them to do shopping in designated
stores, which would then give them commissions of
up to 30% on goods purchased by the tourists.
In October, a "zero-fee" group from the
remote northwestern Chinese province of Qinghai
were abandoned by their tour guide after they
refused to buy goods at certain shops.
A
tour agent named Law, who has been working in the
local travel industry for about 30 years, said the
problem was that members of the "zero-fee" tour
groups were not taken to retailers with good
reputations but to unscrupulous shops that cheat
customers.
"The unscrupulous shops offer a
commission for shopping up to 30%, which could
cover the profits of the local travel agencies and
salaries of the tour guides. Therefore, the tour
guides make a great effort to lure [them into
shops] or [pressure] the tourists to shop," she
said.
To reduce the risk of tourists
falling victim to shopping scams and help restore
mainland tourists' confidence in Hong Kong, the
city's Travel Industry Council (TIC) recently came
up with several ways to offer greater customer
protection, including extending the length of the
14-day 100% refund guarantee to six months.
The TIC said that goods, as long as they
are accompanied by receipts, will be eligible for
a refund even if they are without the original
packaging.
To deal with shops employing
irregular practices, shops against which
complaints have been recorded by the tourism board
or the Consumer Council will be punished under a
demerit system and have their names posted on the
TIC's website.
Travel agencies will be
asked not to bring tourists to shops that already
have 30 demerit points, and these shops will not
be allowed to change their names for one year.
The TIC will ask the shops to sign pledges
next month to implement the new measures. From
June 1, travel agencies will not be allowed to
bring tour groups to shops that have not signed
the pledge.
Across the border, in a bid to
regulate the outbound tour market, the China
National Tourism Administration and the State
Administration for Industry and Commerce have
drafted a standard contract for outbound travels.
According to the contract, effective from March
20, travel agencies handling outbound tour groups
have to provide members with a detailed itinerary,
specifying hotel accommodations and day-to-day
activities, including which shops the tourists
would be taken to.
On the other hand,
travel agencies have the right to claim damages of
up to 90% of the total cost in the event of a
customer breaching the contract.
Shenzhen,
the first city making a move to support the new
administration, also unveiled 10 rules relating to
package tours to Hong Kong.
Shenzhen
Tourism Association said travel agencies will face
a penalty of 1,000 yuan (US$129) if they fail to
list detailed charges for each meal and time
allotted for parks and other entertainment centers
in the contract with tourists. They will face a
penalty of 5,000 yuan if they change the
itinerary, or charge extra fees during the trip,
and a fine of 10,000 yuan if they work with
companies or individuals who are not members of
the Hong Kong Inbound Tour Operators Association.
The association on April 11 also started
to charge mainland tourists a minimum of HK$300 in
the hope of discouraging agents from offering
zero-fee tours. The association hopes that levying
the fee, which will rise to HK$1,000 by the end of
May, will reduce the risk of tourists falling
victim to shopping scams.
At present, up
to 80% of zero-fee tours are organized by travel
agents in Shenzhen.
It's too early to say
whether the measures launched by the mainland and
Hong Kong are effective, but some of them have
drawn criticism from the industry.
Law
said the extension of the unconditional refund
period from 14 days to six months might be a
source of inconvenience for many shops including
those with good reputations.
"Take digital
cameras and mobile phones as examples - their
prices usually drop significantly in six months.
The proposed extended refund time might be taken
advantage of by some people," she said.
"Given the supply of tour guides exceeding
the demand in Hong Kong, the lowest bidder is
always selected, so a HK$300 charge imposed on a
mainland travel agency to subsidize the local
agency receiving the tour group can hardly stop
them from the latter's reliance on commissions
from shopping by the tourists," she said.
Olivia Chung is a senior Asia
Times Online reporter.
(Copyright 2007
Asia Times Online Ltd. All rights reserved. Please
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