MR YIU SI-WING (in Cantonese): Chairman, my views on the Government's amendments are as follows:

First of all, I would like to present my views on changing the requirements relating to physical stores.

At present, Hong Kong travel agents must have fixed offices or branches before applying for licences. The Travel Industry Bill ("the Bill") proposes that licensed travel agents will not be required to have operating premises and branches in the future and they only need to have contact addresses, which is a rather substantial change.

With technological development, the transfer of travel agent business from physical stores to online operation is the development trend. Having the advantages of convenient transaction and multiple choices, many online travel agents in Hong Kong and overseas are increasingly welcomed by Hong Kong people. With the emergence of online travel agents, difficulties in regulation have been encountered in various places because many online travel agents have not been registered and do not have offices in Hong Kong and transactions are conducted outside the territory. If there are complaints, the existing mechanism basically cannot handle them. These online travel agents do not have operating costs in Hong Kong and the regulatory authorities cannot penalize them in case of violations. This is very unfair to licensed travel agents and there is a lack of protection for consumers. There are no channels for members of the public to lodge complaints against goods not matching the descriptions. For example, travellers purchased DIY tour packages but the receipts were not stamped, so they would not be protected under the Travel Industry Compensation Fund in the event of accidents. In fact, many online travel agents promote products in Hong Kong through different publicity channels and it is difficult for the public to tell whether they are licenced travel agents in Hong Kong.

The regulation of online travel agents is a new challenge throughout the world. The new Bill also regulates online travel agents, requiring them to apply for licences, deposit guarantee money and appoint authorized representatives if they promote and sell travel products in Hong Kong. However, they do not need to have places of business and they only have to provide correspondence addresses. This amendment can also reduce operating costs and provide young people with opportunities to start a business.

An improvement in the Bill is the regulation of online travel agents, which is welcomed by the trade and the public, but another problem has arisen. The Administration must change the existing requirement for traditional travel agents to have fixed premises before applying for licences; otherwise, it will be unfair.

Finally, the Government has accepted the advice of the trade and Members. Just now, Dr KWOK Ka-ki said that the Government only listened to my views but the proposals on cancelling the requirement of having fixed premises and strengthening regulation of online travel agents are actually made by Mr WU Chi-wai and Mr Charles Peter MOK and they insisted that the Government should make the amendments. Thus, the Government has not only listened to my opinions but also listened to the opinions of various parties objectively. The authorities has decided to cancel the requirement of having fixed premises, i.e. travel agents only need to provide correspondence addresses when applying for licences in the future. This provision to remove the barriers can solve the regulation problems of online travel agents, and is thus welcomed by micro, small and medium travel agents.

Another issue is the composition of Travel Industry Authority ("TIA"). According to section 1 in Schedule 9 to the Bill, the Administration proposes that members of TIA should comprise one Chairperson (non-trade member), one Vice-chairperson (taken up by the Commissioner for Tourism) and not more than 28 ordinary members; and it must be ensured that the Chairperson and not more than 15 ordinary members are non-trade members and that not more than 13 ordinary members are trade members. In considering the proportion of non-trade members and trade members, the Government hopes that the composition can ensure representation and the opinions of different stakeholders can be taken on board, so as to make TIA more credible and professional. As regards non-trade members, the Government proposes the appointment of individuals who have knowledge in law, accountancy, insurance, education, consumer affairs or general administration such that TIA can effectively tap different views from outside the trade to assist in discharging different functions.

Concerning trade representatives, the Government has further optimized the arrangements, so that trade representatives with different backgrounds can join TIA. The new proposal has a wider coverage with not more than three travel agents specialized in inbound tour group business and not more than three travel agents specialized in outbound tour group business. The Government has also accepted the proposal made by me and the trade to appoint not more than three representatives from the Travel Industry Council of Hong Kong ("TIC"). TIC is a trade association with rich experience in trade regulation. With more than 1 700 travel agents as its members, TIC has wide representation and can fully reflect the voices of the trade. If TIC representatives are members of the future TIA, they can facilitate TIA in collecting opinions from the trade while the trade can, through TIC, disseminate travel information of interest to TIA, the media and the public. As I said yesterday, TIC representatives can help the trade handle some crises and continue to contribute to the travel trade. Thus, we hope the Government can include TIC representatives in TIA. Finally, I would like to thank the Government for implementing this proposal and incorporating the relevant contents into the Bill. In addition, the Administration has appointed not more than four tourist guide representatives or tour escort representatives to be members of TIA. The trade welcomes this move as TIA can then have a better understanding of the situation and opinions of the travel trade, especially its frontline practitioners.

Chairman, the third issue is to revise the accommodation exemption from 14 days to 28 days. In the course of deliberation, I found that the exemption criterion under the Bill for the definition of accommodation arranged by travel agents is inconsistent with the existing Hotel and Guesthouse Accommodation Ordinance. The Bill originally stipulated that if any person who obtains for another visitor to Hong Kong accommodation for more than 14 days, he is not carrying on travel agent business. However, under the Hotel and Guesthouse Accommodation Ordinance, only property rentals for more than 28 consecutive days will be regarded as not carrying on hotel or guesthouse business. The inconsistency of these two provisions will create regulatory loopholes, i.e. if a traveller rents accommodation for 15 to 27 days, this is not regarded as hotel reservation service, and property developers can openly arrange for 15 to 27 days of accommodation for travellers without having to get a travel agent licence. Such a reservation arrangement contravenes the provisions of the existing Hotel and Guesthouse Accommodation Ordinance and is also unfair to licensed travel agents. Finally, the Government has accepted my proposal. Initially, any person who obtained for another visitor to Hong Kong accommodation for more than 14 days would be exempted; the number of days has now been increased to 28 days so as to be in line with the Hotel and Guesthouse Accommodation Ordinance. I support the relevant amendments. Therefore, only those of us who are relatively more professional can make better proposals, and we do not only care about the interests of the travel trade as suggested by Dr KWOK Ka-ki.

The Government proposes to amend the definition of Mainland inbound tour groups and add the definition of Mainland travel agents to achieve the legislative intent of regulating unauthorized tour groups. The Bill originally defined a Mainland inbound tour group as a tour group consisting of two or more visitors from the Mainland; any person who obtains accommodation, transportation, sightseeing, shopping and other services for a Mainland tour group organized by a person on the Mainland are carrying on Mainland inbound tour groups business. We think there are problems with the definition. Although we understand that the legislative intent is to combat unauthorized travel agents and to state that cooperating with travel agents that have not been approved by the Mainland travel authorities is unlawful, the literal meanings may create problems and cause misunderstanding.

First, according to the above definition, two or more visitors will form a tour group. Yet, if Hong Kong travel agents receive families on private tours; or arrange two to three travellers to share a rental car on DIY tours without providing other services, they will still be included in the scope of regulation. The scope of regulation is too wide and not very reasonable. Second, the original provisions of the Bill stipulate Hong Kong travel agents can only receive Mainland inbound tours which are organized by agencies approved by the Mainland travel regulatory authorities (i.e. the Ministry of Culture and Tourism). In fact, many Mainland inbound tour groups may be organized by societies, government agencies, enterprises or schools for studies, training or exchange purposes. As such tours are not necessarily organized by Mainland travel agents, the requirement that they must be approved by the Ministry of Culture and Tourism is inappropriate.

In addition, there are also problems with the following original provision of the Bill: "a Mainland inbound tour group organized by a person on the Mainland". If a tour group is formed overseas and its members are mainly foreign travellers with two or more members being Mainland travellers holding Chinese passports, the tour will meet the definition of "person on the Mainland". Such tour groups are also included in the scope of regulation and this seems unreasonable and inappropriate.

I have made counter-proposals to the Government based on these views, hoping that adjustments will be made. Finally, the Government deleted the definition that a tour group consisting of two or more visitors and give a clearer definition of Mainland travel agents so as to comply with the legislative intent. Hence, I welcome the relevant provisions. Chairman, these are my explanations on the Government's proposed amendments.

Thank you, Chairman. I so submit.