Law Project (Powerpoint)


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Law Project (Powerpoint)

  1. 1. Tourism Business, Ethics and Law Group 1 Presentation Liu Nga Yin, Paul (09530445D) Wong Chun On, Johnny (09125956D) Wong Kwai Leung (09034250D) Yip Tsz Wa, Yvonne (09517712D) Sin Fung Sang ( 09080352D) 封面
  2. 2. <ul><li>Introduction and objectives </li></ul><ul><li>Company background </li></ul><ul><li>Problem analysis </li></ul><ul><li>Conclusion and recommendation </li></ul><ul><li>Reference list </li></ul>Presentation flow
  3. 3. <ul><li>Topic: Solving disputes with customers </li></ul><ul><li>Target: Miramar Travel </li></ul><ul><li>Objectives: </li></ul><ul><li>To identify the legal problems </li></ul><ul><li>To examine the legal strategies and management policies of Miramar Travel on customers’ complaints </li></ul><ul><li>To provide legal suggestions to the company to enhance relationships with customers </li></ul>Introduction and objectives
  4. 4. <ul><li>Was founded in 1986 </li></ul><ul><li>Member of Henderson Land Development Company Limited </li></ul><ul><li>One of the largest scale full-service travel agency in Hong Kong </li></ul><ul><li>Member of Travel Industry Council of Hong Kong (TIC) </li></ul>Company background
  5. 5. <ul><li>Quality Living Award 2006 (Travel agency group) </li></ul><ul><li>The Best Europe Tour Award 2008 </li></ul><ul><li>2008 台灣觀光貢獻旅遊潛力無限獎 </li></ul><ul><li>2009 資本傑出旅行社 </li></ul>Awards
  6. 6. It seems that Miramar Travel has done quite well on its operation and can get a number of awards
  7. 7. However, Do they really provide such a high quality of service? <ul><li>Problems: </li></ul><ul><li>Bundled sale of travel insurance </li></ul><ul><li>Cancellation of the tours </li></ul><ul><li>Self-paid activities </li></ul><ul><ul><li>Conduct of the tour guide </li></ul></ul><ul><ul><li>Accidents involving the third parties </li></ul></ul><ul><li>Failure in matching the schedule </li></ul>
  8. 8. Problem 1: Bundled sale of travel insurance <ul><li>Combining the tour packages with designated travel insurance </li></ul>= + Tour package
  9. 9. Including Miramar Travel Four Travel Agencies force their customers to purchase designated travel insurance
  10. 10. Insurance fee is more expensive than others Miramar Travel stipulate their customers to purchase designated travel insurance in tours to Tokyo and Bangkok
  11. 11. Before the disclosure of this problem However, in some tours , the company will still require their customers to have travel insurance After the disclosure of this problem Does not force their customers if they have travel insurance Stipulate their customers to purchase designated travel insurance Provide different choices of insurance companies for them, but not designate only one Strongly advise them to have one Might not force their customers to purchase travel insurance Company’s policies
  12. 12. Updated leaflet (adapted from Miramar Travel) Still require customers to have travel insurance
  13. 13. <ul><li>If accident happen in the tour, will the tour operator be liable? </li></ul><ul><li>Their answers: </li></ul><ul><li>Strongly advise customers to purchase a travel insurance </li></ul><ul><li>Ask customers to sign a contract to decide whether they choose to purchase or not </li></ul><ul><li>Impossible to presume who has to take the responsibility </li></ul><ul><li>From their answers: </li></ul><ul><li>Avoid to answering directly </li></ul><ul><li>Only recommend customers to purchase travel insurance </li></ul><ul><li>Transferring responsibility to insurance company </li></ul><ul><li>Try to prevent themselves in carrying any obligations </li></ul>Phone interview
  14. 14. <ul><li>The Travel Industry Council </li></ul><ul><li>Does not have any specific guidelines or code of practice on this issue </li></ul><ul><li>Suggest travelers to take out travel insurance that meets their needs </li></ul>Legal strategies
  15. 15. <ul><li>Insurance Companies Ordinance </li></ul><ul><li>Not mandatory for consumers joining package tours to purchase travel insurance </li></ul><ul><li>No specific provisions require consumers to purchase designated travel insurance for joining package tours </li></ul>Legal policies
  16. 16. <ul><li>In terms of offer and acceptance </li></ul><ul><li>Advertisement of the tour package is ‘an invitation to treat’ </li></ul><ul><li>Consumers are free to choose to accept the invitation or not </li></ul><ul><li>Both parties have to understand clearly about the content of the package </li></ul>Problem analysis
  17. 17. <ul><li>In terms of ethic </li></ul><ul><li>The travel agency is seeking to maximize benefits for themselves </li></ul><ul><li>Without concerning the customers' choice and needs </li></ul><ul><li>Try to prevent themselves in carrying any obligations </li></ul>Problem analysis
  18. 18. Problem2:Cancellation of the tours <ul><li>Problems </li></ul><ul><li>1.The decisions of Miramar after certain unforeseen event occurred </li></ul><ul><li>2.The decisions of its customers after they are acknowledged of the unforeseen event </li></ul><ul><li>3.The number of people to form a package tour </li></ul>
  19. 19. Case
  20. 20. Legal strategy and management policy <ul><li>Set by TIC </li></ul><ul><li>Cancel the tour because of reasons beyond control </li></ul><ul><li>Reasons beyond control </li></ul><ul><li> technical problems to transport </li></ul><ul><li> change to the frequency/timetable </li></ul><ul><li>without advance notice </li></ul>
  21. 21. <ul><li>Miramar should: </li></ul><ul><li> Notify their customers as quickly as </li></ul><ul><li>possible </li></ul><ul><li> Offer them </li></ul><ul><li>1. Refund </li></ul><ul><li>2. Another package tour within six months </li></ul>
  22. 22. <ul><li>Makes a material alteration </li></ul><ul><li> Prior to its commencement for reasons beyond control </li></ul><ul><li> Increasing operation costs </li></ul><ul><li>Inform clients </li></ul><ul><li>Two choices </li></ul><ul><li>1. Accept with reasonable adjustment in price </li></ul><ul><li>2. Receive full refund within 7 working days </li></ul>
  23. 23. <ul><li>Delay of flight </li></ul><ul><li>Unforeseeable </li></ul><ul><li>no longer to makes provision </li></ul><ul><li>1 st option </li></ul><ul><li>Refund to the affected customers </li></ul><ul><li> according to the Law Amendment & </li></ul><ul><li>Reform Ordinance </li></ul><ul><li>2 nd option </li></ul><ul><li>seek to vary their original contract </li></ul><ul><li>E.g. 1.rearrange accommodations </li></ul><ul><li>2.offer a refund of fees </li></ul>
  24. 24. Problem 3: Optional Tours Main problem:  Lack of transparency of information Case : MingPao news, 2006 <ul><li>Miramar Travel </li></ul><ul><li>Optional Tours </li></ul><ul><li>XXX…$ XX </li></ul><ul><li>XXX…$ XX </li></ul>…… Travelling time ? No. of people to form optional tour ?
  25. 25. Dealing with main problem <ul><li>Further improvement in the future </li></ul>Management policies
  26. 26. Legal Strategies <ul><li>TIC’s Directives: </li></ul>
  27. 27. Legal strategies Miramar Travel Outbound tours service Do not break any directive of TIC Continuously sell optional tours without full statement
  28. 28. 2 Sub-problems <ul><li>Tour escorts ’ conduct and tour guided ’ conduct </li></ul><ul><li>Accidents caused by third party </li></ul>
  29. 29. Dealing with sub-problem 1 Management policies Actively ma k e evaluation with the involved escorts or local tour guide
  30. 30. Legal strategy <ul><li>Terms and Conditions: </li></ul>
  31. 31. Legal strategy No evidence Miramar Travel Assume: joined at travelers’ will not be liable to compensation
  32. 32. Dealing with sub-problem 2 <ul><li>1. To claim medical treatment fees </li></ul><ul><ul><li>compulsory requirement </li></ul></ul>Management policies
  33. 33. <ul><li>2. Follow “Code of Conduct for Outbound Tour Escorts” of TIC : </li></ul><ul><ul><li>Arranged patients to the local hospital </li></ul></ul><ul><ul><li>Contact the insurance companies </li></ul></ul><ul><ul><li>Report the accidents to the company </li></ul></ul>Management policies
  34. 34. Management policies <ul><li>3. Contact the third party to further understand the incident </li></ul><ul><ul><li>Evidence was found </li></ul></ul><ul><ul><li>Third parties ’ negligence </li></ul></ul><ul><ul><li>Stop their customers doing activities </li></ul></ul>
  35. 35. Legal strategies <ul><li>Terms and Conditions: </li></ul>Not be liable for any damage caused by the third part ies
  36. 36. Problem 4: Failure in matching the scheduled program <ul><li>Changed mode of transportation </li></ul><ul><li>no more domestic flight </li></ul><ul><li>Missed scenic spot </li></ul>Case: Apple Daily 2004-10-12
  37. 37. Problem analysis <ul><li>Discharged by breach </li></ul><ul><li>Break conditions </li></ul><ul><li>Claim for damages </li></ul>
  38. 38. Problem analysis <ul><li>Right to arrange another hotel </li></ul><ul><li>of the same rank </li></ul>The Peninsula Hong Kong = Four Season Hotel
  39. 39. Problem analysis <ul><li>Mistake of Air tickets </li></ul><ul><li>ready </li></ul><ul><li>not discharged by frustration </li></ul><ul><li>reasonable skill and care (the implied terms ) </li></ul><ul><li>a proper PRC agent </li></ul><ul><li>Reasonable standard </li></ul><ul><li>excluded unnecessary mistakes </li></ul>
  40. 40. Legal strategies <ul><li>Terms and conditions </li></ul><ul><li>brochure </li></ul>
  41. 41. Legal policies <ul><li>Terms and conditions </li></ul><ul><li>Evidence about uncontrollable circumstance </li></ul><ul><li>e.g. transportation delay, the disaster, the war, the political turbulence, the stress of weather and the like </li></ul>
  42. 42. Management policies <ul><li>Ways to solve disputes </li></ul><ul><li>Spokesperson </li></ul><ul><li>admits </li></ul><ul><li>Compensates customers each person of $1600 dollars </li></ul><ul><li>$600 for air ticket fees </li></ul><ul><li>$1000 for missing scenic spot </li></ul>
  43. 43. Management policies <ul><li>Ways to solve disputes </li></ul><ul><li>Terminates the cooperation immediately </li></ul><ul><li>Feel regret </li></ul>
  44. 44. Conclusion <ul><li>The company’s action </li></ul><ul><ul><li>Complied with the law </li></ul></ul><ul><ul><li>BUT, inadequate </li></ul></ul><ul><ul><li>Balance between the profit and the service </li></ul></ul>
  45. 45. Recommendation <ul><li>a). Bundle sales of travel insurance: </li></ul><ul><li>Create specific provisions to increase the flexibility of the sale of tour packages </li></ul><ul><li>If the situation becomes prevalent, government should legislate and forbid the travel agencies to combine the tour packages with designated travel insurance. </li></ul>
  46. 46. Recommendation <ul><li>b). Optional tours: </li></ul><ul><li>1. Disclosure of more details about optional tours </li></ul><ul><ul><li>Increase transparency </li></ul></ul><ul><ul><li>One more directive </li></ul></ul><ul><ul><ul><li> protecting the outbound travelers </li></ul></ul></ul>Suggested new directive: “ Member agents must provide outbound visitors with written information about the contents of the optional activities to be directly sold to them.”
  47. 47. Recommendation <ul><li>2. Sub-cont r act about optional tours </li></ul>+ Normal contract Sub-cont r act about optional tours <ul><ul><li>legal formal contract </li></ul></ul><ul><ul><li>a full list of the optional tours </li></ul></ul><ul><ul><li>prices </li></ul></ul><ul><ul><li>number of people to form the optional tours, etc. </li></ul></ul>
  48. 48. Recommendation <ul><li>2. Sub-cont r act about optional tours </li></ul><ul><li>Benefits: </li></ul><ul><li>More information before signing the contract </li></ul><ul><li>Select at travelers’ will on a list of optional tours in the sub-contract </li></ul><ul><li>legally binding on both tour escorts and travelers </li></ul><ul><ul><li>not coerce the travelers to join </li></ul></ul><ul><ul><li>follow the sub-contract to provide the travelers’ preference of optional tours </li></ul></ul><ul><ul><li>Otherwise, sued by breach of contract </li></ul></ul>
  49. 49. Recommendation <ul><li>3. To be more respectful to the customers’ interest </li></ul><ul><ul><li>Follow “General Code of Conduct for TIC Members” of TIC : </li></ul></ul><ul><li>When complaints are of such a nature that reference to the principal is necessary , a member shall endeavor to act as an intermediary to bring about a satisfactory conclusion. </li></ul><ul><ul><li>Assist customers in obtaining compensation from third party </li></ul></ul>
  50. 50. Recommendation <ul><li>c). Failure in matching the scheduled program </li></ul><ul><li>More careful selection of third party </li></ul><ul><li>TIC directive </li></ul><ul><li>follow </li></ul><ul><li>liable to the services provided by cooperation partners </li></ul><ul><li>travelers can get better services and protection </li></ul><ul><li>a limit for Miramar travel’s liabilities </li></ul><ul><li>limited compensation </li></ul>Cooperation partners
  51. 51. Reference list <ul><li>Apple Daily. (2008). “ 導遊施壓參加遊艇河出意外團友斷指旅行社卸責 ” , Retrieved October 14, 2009 from, Web site: </li></ul><ul><li>Carver, A., 2004, Hong Kong Business Law , 6th ed., Hong Kong: Longman Hong Kong Education.,17,372-373 </li></ul><ul><li>Consumer Council. (2009). Council critical of bundled sale practice of some travel agents - CHOICE # 393 (July 15, 2009). Retrieved October 22, 2009 from </li></ul><ul><li>Desjardins, J. (2009). An introduction to business ethics . Singapore: McGraw Hill </li></ul><ul><li>Miramar Travel. (2009. Terms and Conditions . Retrieved October 24, 2009 from </li></ul><ul><li>Stott, V. (2001). An Introduction to Hong Kong Business Law . Longman Hong Kong Education </li></ul><ul><li> (2009) 四家旅行社迫客購指定保險 . Retrieved October 21, 2009 from </li></ul><ul><li>Travel Industry Council of Hong Kong. (2009). Code of Business Practice on Outbound Package Tours . Retrieved October 15, 2009 from, Web site: </li></ul>
  52. 52. Reference list <ul><li>Travel Industry Council of Hong Kong (2009). FAQs for Travelers. Retrieved October 15, 2009 from, Web site: </li></ul><ul><li>Travel Industry Council of Hong Kong. (2009). Code of Conduct for Outbound Tour Escorts. Retrieved October 17, 2009 from, Web site: </li></ul><ul><li>Travellife (2006). “ 旅團單張欠透明度 領隊臨場訴諸群眾壓力 自費活動團友難說不 ” Retrieved October 12, 2009 from, Web site: </li></ul><ul><li>旅遊九寨溝團友飽受煎熬 內地接待單位連番失誤 . (2004, October 12). Apple Daily, p.C20 </li></ul><ul><li>昔日東方 . (2008). “ 美麗華遊泰團 9 人屙嘔 ” , Retrieved October 12, 2009 from, Web site: </li></ul><ul><li> </li></ul>