Question:
 
     The Travel Industry Authority (TIA), established under the Travel Industry Ordinance (Cap. 634) in January 2020, will take over the functions of licensing and regulating the tourism trade from the Travel Agents Registry and the Travel Industry Council of Hong Kong, as well as the administration of the Travel Industry Compensation Fund (the new regulatory regime). While the Government allocated $350 million as seed money to the TIA in February 2020 to support the initial operation of the TIA, the TIA will run on a self-financing basis in the long run. Its major sources of revenue are levies on outbound fares received by travel agents, licence fees, and registration fees on inbound tour groups from the Mainland. To reduce the impacts brought about by the new regulatory regime on the trade, the Government has proposed maintaining, for the first five years from the full implementation of Cap. 634, the former two items of levies and fees at the levels when Cap. 634 came into operation. In this connection, will the Government inform this Council:
 
(1) whether it knows the timetable for TIA's preparation for the full implementation of the new regulatory regime; whether the preparation work has been delayed under the impact of the COVID-19 epidemic;
 
(2) whether it knows the latest progress of TIA's work on drafting the subsidiary legislation under Cap. 634 and on formulating the relevant administrative guidelines; whether the TIA will, when carrying out the relevant work, consult the tourism trade to ensure the operability of such instruments;
 
(3) as some members of the tourism industry have pointed out that the tourism industry was hit consecutively by the social incidents and the epidemic in the past two years and the road to recovery is long, which may thus affect the revenue of the TIA, whether the Government will consider my earlier suggestion of increasing the seed money to $500 million, so that TIA's financial situation will be more stable; and
 
(4) how the current organisation structure and staff establishment of the TIA compare with those initially planned by the Government; if adjustments have been made, of the details?

Reply:
 
President,
 
     The Government introduced the Travel Industry Bill to the Legislative Council (LegCo) in March 2017 following the general consensus reached after the public consultation in 2011. The Bill proposed to regulate travel agents, tourist guides and tour escorts in a holistic and impartial manner through the establishment of the Travel Industry Authority (TIA) with a view to enhancing the professionalism of the travel trade and fostering the healthy long-term development of the industry. The TIA will take up the trade regulatory and licensing roles from the Travel Industry Council of Hong Kong and the Travel Agents Registry respectively.
 
     The Travel Industry Ordinance (Cap. 634) (the Ordinance) was passed by the LegCo in November 2018. The Government immediately commenced preparations for the implementation of the new regulatory regime and allocated $350 million as seed money for the TIA. The Ordinance commences in two phases. Firstly, the provisions of the Ordinance for establishing the TIA were brought into operation in December 2019. The Chief Executive also appointed the Chairman and Members of the TIA with effect from January 1, 2020. Since its establishment, the TIA has embarked on various preparatory tasks for implementing the new regulatory regime, including drafting subsidiary legislation of the Ordinance in relation to the conditions imposed on a licence, the requirements that licensees must comply with, and the fees payable to the TIA; and devising directives, guidelines and codes of conduct regulating licensees. All of the subsidiary legislation and the other provisions of the Ordinance will take effect upon the completion of the transitional arrangements.
 
     In response to the question raised by the Hon Yiu Si-wing, my reply is as follows:
 
(1) The Government is committed to supporting the TIA in preparing for the formulation of the new regulatory regime for the travel industry, including preliminary administrative work (such as staff recruitment and office leasing matters), drafting subsidiary legislation, and formulating licensing frameworks, directives, guidelines and codes of conduct, etc. Progress of the preparatory work has inevitably been affected by the epidemic. However, the Government still aims to implement the new regulatory regime in about two years after the establishment of the TIA. It is expected that the regime will be fully implemented within 2022 as planned.
 
(2) According to the Ordinance, the TIA may prescribe the conditions imposed on a licence, the requirements that licensees must comply with, and the fees payable to the TIA, etc, through making subsidiary legislation. The TIA may also regulate the licensees through issuing guidelines, directives and codes of conduct, etc. The TIA is actively taking forward the relevant work regarding the drafting of subsidiary legislation, as well as the drafting of directives, guidelines, and codes of conduct applicable to travel agents, tourist guides and tour escorts under the new regulatory regime with reference to the existing codes of conduct and guidelines. The TIA maintains close liaison with the trade on the relevant work, and will consult the trade in a timely manner when detailed proposals are available.
 
(3) As mentioned above, to support the initial operation of the TIA, the Government has allocated in February 2020 $350 million as seed money for the TIA. The TIA has been closely monitoring its financial situation and has set up a standing committee to advise it on issues relating to financial management (including investment). If the TIA requires additional funding from the Government, the Government will handle it in accordance with the established procedures.
 
(4) The current organisational structure and manpower requirement of the TIA are similar to the original plan. The administration of the TIA is led by an Executive Director. Under its organisational structure, there are three divisions, namely Regulatory Affairs Division, Operations Division, and Corporate Services Division. The estimated number of staff members required is about 90.