Government is anticipating that harsher penalties approved by Parliament last week will wipe out what it says is a “raft of unregistered travel agencies” that have been milking money from unsuspecting travellers for vacations that never happen.
According to Tourism Minister Edmund Bartlett, that was the intent behind the Bill he brought to Parliament last week amending the Travel Agency Regulations, even as the ministry continues its review of the entire Act related to the operations of the travel service industry.
“The purpose of the amendment is to increase the penalty for operating unregistered travel agencies… several of these unregistered travel agencies have taken money from unsuspecting customers for trips that did not happen. We hope these increases in penalties will be a deterrent,” Bartlett told the Lower House at its sitting last Tuesday.
Part of the problem he said, had to do with the fact that very little has been done to amend the legislation since 1956 when the sector began to operate, despite the many changes it has undergone over time.
The number of agencies has dropped from 170 down to 50 registered agencies primarily as a result of the decrease in airline commissions, now down from nine per cent to three per cent.
“This reduced commission has caused a number of closures and some mergers. With the decline in the number of agencies some staff cuts occurred, plus some new entrants decided to set up a number of unregistered agencies all across the island. These entities operate in contravention of Section 3(2) of the Act which states that from and after the appointed day no person shall operate or be concerned in the operation of a Travel Agency whether or not it was in existence before that day unless it is registered,” Bartlett outlined.
“Several of these unregistered travel agencies have got into trouble with customers who paid them for travel which did not materialise,” he told Parliament.
Bartlett went further to point out that as a result of not being registered, there is no bond or insurance, and therefore no protection for clients who are duped.
Prior to the recent amendments, agencies in breach were liable on summary conviction before a Resident Magistrate’s Court to imprisonment with or without hard labour for no more than 12 months; or for a fine for each day the contravention continues, not exceeding $20 dollars daily, and, in default of payment, to imprisonment with or without hard labour, for a maximum three months.
“That represents a very light response to a very difficult and heavy contravention. Those fines are very miniscule and offer very little by way of a deterrent to those operating outside the remit of the law,” Bartlett said.
On Tuesday, the House gave its assent for Section 3 of the principal Act to be amended to allow for an increase in penalties to a maximum fine of $1 million, or a maximum custodial sentence of 12 months, or to both fine and imprisonment. A new provision was also included to allow the minister to amend monetary penalties in the Act and increase the penalties imposed subject to affirmative resolution of Parliament.
In the meantime, Bartlett on Tuesday said the move was not to be seen as a strike against travel agencies as they “continue to play a key role in the whole business of reservations”.
“A 2006 survey found that travel agents book 80 per cent of all air travel, 30 per cent of all hotel reservations and 95 per cent of all cruise reservations. Last year, 77 per cent of cruise vacations were booked by travel agents and 73 per cent of hotel reservations.
“We want to continue to look at the overall Act so as to give travel agents a real place in the system, because there is a place for them,” the tourism minister pointed out.
Opposition Spokesperson on Tourism Dr Wykeham McNeill, in noting that the Bill was “not controversial”, said it was “very important for us to ensure that the regulations and the penalties are in place”.