What Is The Travel Agents Act and Why Should Singaporeans Pay Attention?

travel agents act

So you’ve been saving up for many moons and have finally booked the trip you’ve been dreaming about for years. This overseas voyage is going to change your life!

And indeed it does, but not in the way you expect. The travel agent through which you booked your tickets and accommodation is unceremoniously shut down, and now you’re not just unsure if this trip of your dreams will even materialise, you also have no idea if you’ll get your money back if it doesn’t.

Well, that is what customers of Misa Travel went through last year when the well-known travel agent shut down suddenly after having its licence revoked by the Singapore Tourism Board (STB) under the Travel Agents Act.


So what is this Travel Agents Act, and why should we care?

It is illegal for travel agents to operate in Singapore without a licence. The Travel Agents Act sets out the rules governing revocation and suspension of this licence. The licence can be be revoked at any time if the STB is satisfied that the travel agent is guilty of certain things.

For instance, if the STB is satisfied that the travel agent has been carrying on the business of a travel agent in such a manner that renders him unfit to continue to hold a licence, or has contravened any of the provisions of the Travel Agents Act or the rules made under it, their licence can be revoked.

STB does this to protect consumers from unscrupulous business practices, such as false advertising, cancelling of bookings and so on.

But this also means that a travel agent’s licence can be revoked on very short notice, leaving customers in a lurch.


What are the proposed amendments?

The STB and Ministry of Trade and Industry have put forward several proposed amendments to the Travel Agents Act and Travel Agents Regulations. Here’s how the amendments will affect us:


1. Travel agencies will have less time to explain why they should be allowed to keep their licences

Right now, when STB sends out a notice to revoke a travel agent’s licence, the latter has 21 days to explain why they should be allowed to retain their licence.

One proposed amendment shortens this period from 21 days to 14 days. This effectively means that travel agents can lose their licences even more suddenly than before.

But for travellers, it also means that if their travel agent goes under, they get notified one week earlier, which gives them more time to make alternative travel plans if necessary.


2. Travel agencies will be required to tell customers to buy travel insurance protecting them against insolvency

Right now, travel agents are technically required to tell customers to consider buying travel insurance that covers for insolvency when they book trips worth at least $1,000.

This travel insurance will ensure customers get compensated if the travel agency goes under. The agent is then obliged to keep records of the customer’s insurance purchase decision. The problem is, many travel agents still flout these rules and get away with it.

Well, not when the proposed changes kick in. The requirements on travel insurance will be legislated, which probably means that travel agencies who are caught circumventing the rules will lose their licences more easily.


Should you still make bookings through travel agencies?

The government is clearly taking steps to protect customers from travel agents becoming insolvent or suddenly being forced to shut down.

Other than the MISA Travel debacle, S Travel, a company specialising in tours to Korea, shut down last year, and Asia-Euro Holidays folded in 2015. Each time, scores of customers got left in a lurch.

Despite the stronger safeguards, let’s be honest—in this day and age, unless you absolutely want to go on a package tour, there are usually few reasons to book through a local travel agency. You can get even better deals doing your own air ticket research online using sites like Skyscanner and then booking and paying for your air tickets instantly.

But should you decide to go the travel agency route, travel insurance that covers you if the agency shuts down is a must.

Do you ever book your holidays through travel agencies? Tell us why or why not in the comments!

Always suffering from wanderlust? Here are some other articles you might be interested in:

5 Countries That Singaporeans Still Need a Visa For and How Much it Costs

Do You Need to Pay GST When You Buy Stuff on Overseas Holidays?