Did You Know The Trips You’re Signing Up For Are With a Licensed Company?

Recent years have been a growth spurt for China. An ever-growing number of motivated foreign nationals have been attracted to the mainland for business trips, professional opportunities, and the pursuit of study and adventure. With the inbound tourism flow growing the market day by day, more and more local businessmen moved to get in on the action. Before long everyone was out on the market – the large-scale venture companies, education, training, and cultural institutions, down to the small team and even one- and two-bit operations – all soliciting travelers, competing for their piece of the international tourist pie.

As a player in the travel industry for going on 10 years now, I have a clear perspective of the local industry landscape. Lack of oversight by the relevant regulating authorities, gaps in the law, and a lack of awareness of personal legal responsibilities on the part of the managing individuals… put it all together and you have a recipe for an environment where illegitimate travel business is conducted openly and thrives. This is the current situation in China, and there’s minimal top-down action being taken to curb the situation.

A meaningful experience is valuable. Regardless of whether you are here for work, study, a business trip or travel, local tours and activities are the keys to enriching experiences that help you forge a meaningful connection to this place, its people, and culture. What is valuable, we want to protect. This is why today TA is here to tell everyone a few vital points about the international client tour operator scene here in China.

Read below to understand how certain local tour operators may put you at risk.

PART ONE - Two Chinese travel industry issues you need to know about

1. Travel and tours services operating under the guise of an individual WeChat Public Account (illegal and unregulated)

Familiar with WeChat? This is one social networking app everyone gets the hang of quickly. A hub for social networking and e-commerce - convenience and speed are its’ essence. WeChat is great for things like, oh I don’t know, signing up for locally run tours and travel activities. But wait, have you ever stopped for a moment to think about the entity on the other end of the transaction? Is it a company? A small group of people? Or just… some guy?

We’ve done research. Of all the WeChat Public Accounts registered as ‘Travel Content’ providers, 95% are private WeChat accounts no different from yours. This is the core of our first important point – something that maybe never crossed your mind: 95% of travel activity and tour providers on WeChat are NOT registered travel companies or even accredited tour operators.

Unregistered, unaccredited. What’s important for you to know is that these small one-person operations are legally incapable of making compensation claims on behalf of customers in the case of any unexpected accidents or unfortunate events. Any “insurance” they claim to have you covered by is null and void. It is of key importance to remember that while in Western countries, like America or Australia, fraudulent travel tours are more or less unheard of and so are not a concern to the average traveler. However, the situation here in China is different.

So then, how can we learn whether a WeChat Public Account is operated by a wayward individual or a registered company? The screenshots below show you how. Next time you’re thinking of taking a trip, we suggest you check out your operator’s credentials. If you find that the trip is operated by an individual, then we suggest you take a moment to carefully weigh the decision. You may be getting a bargain, but the hidden cost is peace of mind - your rights and interests are completely without guarantee.

2. A company, but operating without a Travel Agency Operating Permit .

Now you know how to see the WeChat public account checks out. Good start. But you still can’t be sure: is this a certified travel company (or, just someone who understands that registering as a business is a better look?) What can we do to know?

It’s simple. China’s travel law clearly points out the extra certification requirements necessary to set up a travel company. Once all the requirements are met, the company is given this: the Travel Agency Operating Permit (see the image). Without this operating permit, no tour service can be guaranteed, be insured, or be considered legal.

So, what does this mean to you? After obtaining an operating permit, the company is placed under the supervision of the National Tourism Bureau – a government department that ensures the company acts in the rights and interests of their customers, enforcing that the company purchases the correct liability insurance for customers, and so on.

Every operating permit has a unique serial number, so if you want to know if a travel company is certified and legit, all you need to do is ask for this number. If they can provide it, then you can rest assured – this is a legitimate agency.

I’m confident that the knowledge given above has given you the basic tools necessary to identify legitimate travel companies.

Of course, just because a company is registered and certified doesn’t mean that it doesn’t have other problems. Of course, even Apple and Amazon manage to get complaints daily, with slip-ups in various areas of service. Apple, Amazon and TA all have this in common. But we have something else in common, too: we’re supervised, we take responsibility, and we guarantee the protection of your rights and interests. This, we want you to know.

PART TWO – What it takes to become a legitimate Tour Operator in China.

Ok, that’s two big industry problems introduced. Now, you might be wondering what are the prerequisites for opening a travel company in China?

According to the 28th clause of the ‘Tourism Law of the People’s Republic of China’, the following requirements should be met:

Where applying for the establishment of a travel company for the operation of the domestic travel business and inbound tourism, the following conditions should be met:

(I) The business should have fixed, physical premises.

(II) The business should be equipped with the facilities necessary for the operation of the business.

(III) The business should have registered assets of an amount not lower than ¥300,000.

Note: A Tour Operator’s registered assets should adhere to the requirements listed below:

(1) International Tour Operators are to be in possession of registered assets of an amount not below ¥1500000;

(2) Domestic Tour Operators require registered assets of ¥300000

(IV) Application for establishment of a Tour Operation business requires a Quality Guarantee Deposit, which is to be made to the Department of Tourism Administration referencing the following criterion:

(A) International Tour Operators engaging in the inbound tourism business are to submit ¥600000 Chinese Yuan; Operators engaging in outbound tourism are to submit ¥1,000,000.

(B) Domestic Tour Operators are to submit ¥200000. In all cases, the deposited amount and any interest accrued thereon while in the care of the Department of Tourism Administration is the property of Tour Operator; the Department of Tourism Administration my extract management fees from interest on deposits, as per the relevant state regulations.

(C) Quality Guarantee Deposit will be drawn on for the following:

1. Where the Tour Operator, upon investigation by the Department of Tourism Administration, is found to have violated a contractual agreement with, or the lawful rights and/or interests of the traveler.

2. To reimburse loss of advance-paid travel expenses due to the Tour Operator’s dissolution, entry into bankruptcy, etc.

(D) Quality Guarantee Deposit will NOT be drawn on under the following circumstances:

1. Where the Tour Operator is unable to fulfill a contract due to circumstances beyond their control.

2. Where traveler(s) experience accidental unexpected material or physical loss

3. Other economic disputes for which the Quality Guarantee Deposit may not be drawn on.

4. Where the stipulated effective time frame is exceeded

5. Cases already heard by a court.

The travel industry is like any other service industry – we thrive, grow, improve, and last longest only with your supervision, feedback, and support. Just as we need to know you to make the right decisions for you, you should understand us to make the best choices for your own travel.

We hope this article has given you some new perspectives, and useful information.