In 1996, a local tour agency could earn about HK$8,000 (US$1,000) in fees by serving a Shanghai group on a four-day package. Now, rather than receiving a fee, many agencies are paying for tourists who can generate commissions a practice known as "buying tourists."

The practice is widespread on the mainland. Industry insiders, none of whom wanted to be quoted by name, said that mainland agencies picked up the trick from Thai agencies when partnering on Southeast Asian routes. Now it applies to almost every route, from several hundred yuan domestic trips to high-end European tours.

Paying the price

It's no fun being a bought tourist. On these tours, shopping takes priority over everything. There are stories of being awakened at 5 am to make up for the lost time, led into counterfeit dens, deceived into paying double for an item and shut in the store until the guide is satisfied with the sales volume.

Horizon China did a survey in June 2005 in seven cities, including Beijing, Shanghai and Xi'an, the capital of Shaanxi Province in Northwest China. Among the 2,000 urban residents polled, 68.5 per cent said they had unpleasant experiences on their latest tour. The complaints focused on tour guides, deceptive shops, unclear charges and a lack of satisfactory answers to complaints.

But as Wong pointed out at the October 23 press conference, the tour guides are also victims of these cheap deals. Rather than receiving a salary, the guides have to use their own money to "buy" tour groups from agencies. Cindy Wong, a travel guide for four years, said she had to pay a HK$500 (US$64) fixed fee, plus HK$10 (US$1.28) per tourist, to the agency to be assigned a group.

Though some media reports put the commission rate as high as 50 per cent, Wong said she received only 2 to 8 per cent commission. "I once lost more than HK$1,000 on a group," she said.

In September, tour guides went on strike at Jiuzhaigou in Sichuan Province and Xishuangbanna in Yunnan Province two prominent tourist destinations. Ironically, both were triggered by the local tourism authority's crackdown on deceptive package tours. Every link in the chain saw their income squeezed. To the tour guides, taking on a group meant losing money.

When interviewed by the media, the tour guides and coach drivers did not say they were on strike because they weren't employees of the tour agencies. If the agencies do not sign contracts with them, do not pay them salaries and do not buy insurance for them, has the employment relationship ever been established? they asked.

The damage of zero-fee tours has already shown at some destinations. Dali of Yunnan Province, for example, has been recently boycotted by major tour agencies from other parts of the country. The competition among the hundreds of small tour operators in the city is so fierce that one-day tours are selling for 25 yuan (US$3.12) a head. The bad service and high business risk, as a result of the low fee, have scared off well-known tour agencies.

Thailand, notorious for zero-fee tours, has witnessed a steady decline in the number of tourists. Fewer than 3 per cent of overseas travellers from the mainland chose to go to Thailand in 2005, compared with 10 per cent in 1998, the Xinhua News Agency reported.

"The zero-fee practice can be a nightmare for a travel destination," Zhang Guangrui, director of the tourism research centre at the Chinese Academy of Social Sciences in Beijing told China Daily. "When it spreads in the market, travel agencies all suffer from price wars, which no agency can win."

Power of low prices

So, if the tourists, tour guides and the travel industry all suffer from zero-fee tours, why they are so popular?

Tony Tse, a programme director at the School of Hotel and Tourism Management at the Hong Kong Polytechnic University, says the reason lies in two market conditions.

First, there are many inexperienced tourists who depend on these agencies for travel arrangements. "They go where the guides lead them and do what the guides tell them," Tse said. Second, the low-priced packages hold irresistible appeal to budget-conscious tourists.

Crackdowns on zero-fee tours seem to have no long-term effect. The tours disappear for a while but always come back once the inspections stop.

"Quality tours" are difficult to sell, tour agency operators said. Tours that offer no shopping or paid attractions often have to be cancelled because not enough people sign up. Customers always opt for the cheapest deal.

The reliance on these kickbacks has nurtured a culture of deception in the industry. Amid the many promises from tour agencies, it's almost impossible for ordinary tourists to find the real quality deal even if they are willing to pay more, said Wu Jingmin. A tour guide since 1997, Wu is the author of "How Could I Not Fleece You?" a book that exposes many tricks in travel industry.

"A tourist told me he has been cheated on high-priced tours as well as low-priced tours," Wu said. "Of course, he would choose the low-priced tours."

Everybody agrees that something has to be done about the zero-fee tours. But there is hardly any consensus on what should be done, Tse said.

Even defining zero-fee tours is tricky. "Can you punish a merchant for selling a product too cheaply?" Tse said. "What if they claim it's a promotion? How do you watch the profit-making model of each individual company?"

Hong Kong Secretary for Economic Development and Labour Stephen Ip said mainland officials and the Hong Kong Tourism Authority are discussing a standard contract that includes information on which shopping venues will be visited and how long tourists will stay there. Meanwhile, tourists will be informed of their rights and the channels to use to complain.

Wu Bihu, director of the tourism research and planning centre at Peking University, said that the tourism authority can help tourists avoid low-quality tours by providing information such as what the normal price to tour destinations would be. That way, if they see the package price is artificially low, they will have reason to be suspicious.

The China National Tourism Administration has been releasing such information to the media before major holidays and is planning to put more destinations on the list.

"But there will always be some tourists who believe that they're smart enough to avoid all the traps," said a tourism administration employee who declined to be identified. And tourists with limited information are more susceptible to deceptive tour operators.

Wu Jingmin, the tour guide and author, summed up: "Package tours are a kind of special commodity. They are valued for the experience and enjoyment people derive from them. Customers want good value, even the budget-conscious ones."

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