China's tourism authority has decided to return up to 70 percent of its travel agency deposits to help the agencies get through a difficult financial time.
The National Tourism Administration said on Monday that domestic travel agencies can claim back between 50 and 70 percent of their deposits, depending on their location and scale, before the end of January and keep them for at least two years.
These deposits are collected to compensate tourists if losses and accidents occur through mistakes by agencies. Inbound travel agencies usually set aside 100,000 yuan (US$14,541) for deposits and outbound agencies need 1.6 million yuan.
"The move is to help travel agencies counter the operational challenges caused by the global financial crisis and other difficulties," the administration said in the statement.
Yu Weihua, the general manager with the Shanghai China International Travel Service Co Ltd, said the move will immediately boost liquidity for agencies and will throw a lifeline to smaller companies.
"This is very helpful in increasing the cash flow for agencies, especially small ones suffering from the slump in business and finding themselves on the brink of bankruptcy," said Yu. Yu said the global financial crisis had already had a serious affect on the travel industry - when people are not confident about the economy, they cut spending and the first cuts include holidays and travel which are not daily necessities.
(Shanghai Daily December 10, 2008)
