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Travel agents face higher bond deposits
Travel agents offering outbound services will have to double their collateral deposit at banks to VND500 million (US$23,800) against the current rate, according to a draft decree on revising regulations of the Law on Tourism.
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| Tourists shop in Hoi An's Ancient Town. Travel agents offering outbound tourism are likely to have to deposit VND500 million as collateral. |
Current regulations set a collateral deposit of VND250 million for both outbound and inbound tourism. The draft compiled by the Viet Nam National Administration of Tourism leaves the deposit for travel firms with inbound services unchanged, but doubles the rate for firms offering only outbound or both services.
However, the draft also allows travel firms to negotiate their deposit interest rates with banks directly, instead of receiving non-term interest rates regulated by the State Bank of Viet Nam.
The collateral deposit is intended to be used as compensation for tourists when travel agents violate their contracts or deal with risks the tourists encounter.
Travel agents were concerned that the draft would cause them difficulty if approved. They said that since most travel agencies were small- and medium-sized enterprises, the new capital regulations would place a strain on operations.
Agents also said that the collateral deposit was currently used in an irrational manner.
Saigontourist director Vo Anh Tai said that the deposit was now considered ‘dead' money as travel firms could not make use of it. It is hard for travel firms to withdraw the deposit to compensate for tourists because the current regulations are not detailed. Currently, compensation is usually paid out by insurance agencies or by the travel firms themselves.
Tai recommended that the draft include more detailed regulations on the use and management of the deposit to solve the problem.
It should outline which agencies would be authorised to make the withdrawal, so that travel firms could use the full deposit, Tai said.
He said that several countries have set up a dedicated council to manage the activity. When travel firms and banks cannot come to an agreement on compensation, the council uses the deposit to compensate tourists.
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