MATTA Requests New Minister Of Tourism To Amend Or Revoke Problematic Fourth Schedule

Kuala Lumpur, 12 March 2020 – The Malaysian Association of Tour and Travel Agents (MATTA) is calling on YB Dato’ Sri Hajah Nancy Binti Shukri, the new Minister of Tourism, Arts and Culture, to have the Fourth Schedule of the Tourism Industry Act 1992 amended swiftly or revoked altogether.

MATTA President Datuk Tan Kok Liang explains, “The Fourth Schedule contains a section entitled “Travellers Outbound Terms and Conditions” and was issued on 18 February 2000. Over the last 20 years, six tourism ministers have come and gone but there has been no change to the Fourth Schedule despite repeated calls by industry stakeholders to do so. The outdated terms and conditions are problematic instead of helping businesses and travelers.” 

“Consumers and suppliers are adequately governed by the Contracts Act, Trade Descriptions Act and Consumer Protection Act. Moreover, tourism service suppliers are from a large array of diverse industries that include airlines, hotels, theme parks, cruises and other tourism services operating in different countries and subject to their own local laws. Travel agents are professional advisors, who create tour packages and act as intermediaries by linking and delivering travel services seamlessly.”

“Over the past six years, MATTA, BUMITRA Malaysia and MCTA (Malaysian Chinese Tourism Association) had submitted detailed proposals to amend antiquated terms and conditions in the Fourth Schedule and has had a series of meetings with the Ministry of Tourism, Arts and Culture (MOTAC), but regrettably this issue remains unresolved. On hindsight, it would have been better to revoke than amend the Fourth Schedule, as many things are beyond our control such as the Covid-19 which has caused panic resulting in mass cancellations.”

“The Fourth Schedule was drafted way before outbound travel became fully developed. The aviation industry was transformed by the entry of budget airlines allowing millions of Malaysians to fly around the region for their holidays. Stiff competition, low fares with strict terms and conditions are the order of the day. The tourism landscape and business models have changed drastically but the Fourth Schedule is still stuck to where it was 20 years ago.”

“It is also counterproductive for MOTAC to micromanage holiday contracts between travel agents and customers by imposing the same terms and conditions on services delivered by diverse tourism sectors and different countries, each having their own rules and policies for cancellations, postponements, re-routings and refunds. Following the Covid-19 outbreak, the Fourth Schedule has placed travel agents in a quandary. They are now exposed to potential liability of around RM500 million from customers seeking compensation, regardless of cancellation and refund policies of various service providers. As the Fourth Schedule was introduced by MOTAC, the Ministry should take the responsibility and intervene to resolve the current predicament in the industry.”

“This is because many customers are only looking at the minimum administrative fee allowed in the Fourth Schedule, which is RM30 or 2% of the tour fare (whichever is higher), and ignoring the fact that all or a substantial portion of payments forwarded to airlines and hotels have been forfeited according to their cancellation policies. Should the situation escalate, MATTA will consider engaging legal counsel for the travel industry to pursue the matter at a higher court.”

“As consumers are adequately protected by many existing laws, it is best to let travel agents operate freely. This will facilitate open competition in line with the Competition Act 2010. Allowing travel agents to individually determine terms and conditions, products, prices and services can only lead to a healthy and vibrant travel industry, which will benefit all, especially the consumers. Tourism should not be held back by outdated regulations. As such, MOTAC must act decisively to ensure that the Malaysian travel and tourism industry is competitively on par with the rest of the world and legislation on standardisation of terms of holiday contracts between travel agents and holidaymakers must be current and updated to meet the challenges in the marketplace today”, concluded Tan.

President MATTA
Term 2019 – 2021

For further information, contact:
MATTA Communications Department, or 03-9222 1155