Trade split as Thailand mulls scrapping travel agent security deposit

Outbound agents currently put down a one-time security deposit of 200,000 baht

A proposal to abolish the collection of security deposits from Thai outbound agents has been met with mixed reactions from the travel industry.

While his predecessor Kobkarn Wattanavrangkul had proposed to increase the deposit amount, tourism minister Weerasak Kowsurat wants it scrapped entirely as it is deemed especially costly for start-ups.

Outbound travel agents are currently required to pay 200,000 baht (US$6,420), compared with 100,000 baht for inbound and 50,000 baht for inbound and domestic agents.

Outbound agents currently put down a one-time security deposit of 200,000 baht

Suparerk Soorangura, the president of Thai Travel Agents Association (TTAA), told TTG Asia that he strongly supports the minister’s abolition of the deposit.

“The ministry collects guarantee deposits (and places them into the Tourist Business Protection Fund) so disputes between tourists and travel agents can be resolved immediately,” he explained. However, the benefits of the fund – which Suparek approximates to have billions of baht – cannot be equally distributed to all contributing parties.

“Besides, the security deposit requirement increases the workload for the ministry, (when it could devote more) focus to planning and developing Thailand’s tourism, which is now growing slower than neighbouring countries’,” Suparerk added.

The TTAA president instead suggests that the Ministry of Tourism and Sports discuss with insurance companies ways to encourage tourists to protect themselves and reduce their own risks.

On the other hand, Ratchata Warunsukhasiri, owner of Miracle Time Travel, is opposed to the proposal of removing the security deposit. To him, 200,000 baht fees is not a huge sum for travel agents.

He opined that start-up travel agents should have liquidity and be well-prepared prior to establishing a company. Moreover, he advises the ministry to screen entrepreneurs by reviewing tour guide knowledge, personal records, and their ability to understand the market and forecast its movements.

Moreover, Chotechuang Soorangura, associate managing director of NS Travel & Tours, is concerned that the removal of the deposit would give rise to more fraudulent travel agent practices.

“I think the ministry should still collect guarantee deposit, but offer loans with low interest to start-ups that want to enter the tourism industry but are short of revolving fund.”

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