For many years there have been concerns in Hong Kong about the conduct of organised tour groups, particularly from Mainland China, including those which were subject to coerced shopping, leading to a number of reported incidents and in some cases injuries and death.

This was seen as tarnishing the image and reputation of Hong Kong’s travel industry, and indeed questions were raised as to whether this might even harm relations between Hong Kong and Beijing.

On 29 November 2018 the Hong Kong Government passed new legislation, the Travel Industry Ordinance ("the Ordinance"), in order to improve the regulation of travel agents, tour guides, and tour escorts. The Ordinance also establishes a new Travel Industry Authority. A commencement date for the Ordinance has yet to be announced.

The new legislation has been a long time in the making – as long ago as December 2011, the Government announced that an independent statutory body would be set up in order to provide greater regulation for the travel industry in Hong Kong.

Currently there are two regulatory authorities for the travel industry in Hong Kong:

  • The Travel Industry Council of Hong Kong is responsible for trade self-regulation (covering travel agents, tour guides and tour escorts) through codes of conduct and directives, and for taking disciplinary measures; and
  • The Travel Agents Registry, under the Tourism Commission, is responsible for licensing travel agents under the Travel Agents Ordinance.

The Travel Industry Authority, once established, will take over the functions of both the Travel Industry Council and the Travel Agents Registry.

The Ordinance is intended to provide a comprehensive licensing and regulatory system for travel agents, tour guides and tour escorts, with the objective being to enhance the professionalism of the Hong Kong travel industry. It expressly provides that airlines are not "travel agents" simply by providing the means of carriage from or to Hong Kong. In addition, a company will not be carrying on business as a travel agent if, in the discretion of the Travel Industry Authority, the relevant business activities are ancillary to the company’s principal business. The aim is therefore to capture individuals and businesses whose primary function is to organise travel, accommodation, sightseeing and other activities, including shopping. The licensing of on-line travel agents, which have become increasingly popular in Hong Kong’s outbound tourism market, also falls within the scope of the Ordinance.

Carrying on business as a travel agent without a licence is subject to a fine or imprisonment under the Ordinance. The Travel Industry Authority is empowered to impose licence conditions on travel agents (one purpose of which is to prevent coerced shopping), a breach of which is subject to criminal penalties and/or disciplinary proceedings.

The Travel Industry Authority will also assume responsibility for the existing Travel Industry Compensation Fund, which currently provides outbound travellers from Hong Kong with ex gratia payments to compensate them for any loss of outbound fares. The fund also reimburses certain expenses if accidental injury or death occurs in the course of the activities organised by Hong Kong travel agents.