The travel agency in Singapore is under fire. Revenues are declining and their reputations have been called into question, but still the industry continues to gain new entrants. Over the last 3 years, the number of agencies has raised from 1,096 to 1,195 according to the Singapore Tourism Board (STB). Still the number of agencies that close per year has grown over the same term, from 96 to 114 at the end of 2014. Agencies say that their income has been reduced due to consumer direct purchases from hotels and airlines, plus rising labor costs, the same issues which have caused concern for travel agencies across the world. But instead of dying, the industry keeps finding new players which have some consumers crying foul play.
To get a travel agency license, company must pay at least $100,000 and have at least a net worth of the same amount. Ms Kay Swee Pin, interim president of the Singapore Outbound Travel Agents Association (Sotaa), believes the barriers to entry should be higher. It is far too simple for travel agencies to open, sell half prices fairs and collect millions in unprotected deposits then close. A few recent major closures by agencies like Five Stars Tours and Asia-Euro Holidays, have made some consumer advocates wonder if the travel industry in Singapore is little more than a get rich quick scheme. As a result, people are calling on the STB to create and enforce more regulations.
President of the National Association of Travel Agents Singapore, Mr Devinder Ohri, suggests the STB be more exclusive when screening applicants. Others are calling for systems to protect consumer cash that agencies collect upfront for tours. Currently, consumers who give money to agencies have no way to get their money back if the agency closes. This could be easily fixed if agencies placed customer money in escrow accounts, separate from operating accounts. But so far, the only regulations that STB has added require agents to remind customers to purchase insurance against agent insolvency.
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