Australia: Risking international reputational damage to Australia’s tourism industry: the potential fallout of national regulatory reform

Last Updated: 15 May 2014
Article by Tom Young and Kurt Winter


In 2013 visitor expenditure in the tourism industry exceeded $98.5 billion.1 In light of the continued economic downturn in the mining industry, the tourism industry is set to be a major focus for economic growth nationally.2 This is reflected in government policy at the Federal and State levels.3 Interestingly, the tourism industry in Australia is seeing major reform to the legal regime which protects travel consumers with the disbanding of the Travel Compensation Fund (Fund) and the associated licencing regimes established in participating States and Territories.

Some in the industry are concerned that these government led reforms have created major uncertainty around the accountability regime for travel agents and will potentially leave consumers, particularly international tourists, vulnerable.

While many in the industry recognise the need for removing burdensome "red tape", some are concerned that voluntary accreditation schemes may not provide adequate standards of protection for consumers.

The current regime

Although the travel industry in Australia is subject to consumer protection measures contained in the Competition and Consumer Act 2010 (Cth) (CCA), travel agents are also governed by industry specific consumer protection.

In 1986, the National Co-operative Scheme for the Uniform Regulation of Travel Agents (National Scheme) was introduced to promote national industry standards. Participating States and Territories enacted uniform legislation in accordance with the National Scheme and participated in a national compensation scheme for aggrieved travel consumers, the Fund. The Fund, which was also established in 1986, is operated by a Board of Trustees.

In Queensland, for example, the National Scheme was implemented through the Travel Agents Act 1988 (Qld) which provides a licencing regime for travel agents and requires them to participate in the Fund. A consumer could seek compensation from the Fund where a travel agency failed to account for their funds, for example in circumstances of insolvency. Equivalent schemes were implemented in the other participating States and Territories through the Travel Agents Act 1986 (Vic), the Travel Agents Act 1986 (NSW), the Travel Agents Act 1985 (WA), the Travel Agents Act 1986 (SA), the Travel Agents Act 1987 (Tas) and the Agents Act 2003 (ACT) (Travel Agents Legislation).

The current regime is particularly advantageous for international consumers who may be aggrieved whilst travelling in Australia but may not be aware of alternative legal remedies such as competition and consumer law (including the CCA).

The reform agenda

In 2009, the Council of Australian Governments (COAG) Legislative and Governance Forum on Consumer Affairs commissioned a review of consumer protection measures in the travel and travel related services market, including the role of the Fund. The review was undertaken by PricewaterhouseCoopers during the course of 2010.

By 2011, it was agreed that there was a need for reform of travel industry regulation in Australia given significant change in the tourism industry, the adoption of the National Tourism Accreditation Framework to administer "T-QUAL Accreditation" and the commencement of the Australian Consumer Law.

A draft plan was published during the course of 2012 and, following public consultation, COAG adopted the Travel Industry Transition Plan (Transition Plan) in December 2012. The Transition Plan provided key recommendations for reform to be implemented by participating governments including:

  • the repeal of Travel Agents Legislation;
  • increasing reliance on general consumer protection legislation (including the CCA), corporations law, industry-specific remedies and oversight mechanisms;
  • winding up the Fund; and
  • introducing voluntary industry accreditation and an industry-specific dispute resolution scheme.

COAG's reform agenda was informed by a number of considerations including:

  • the increasing use of online and direct access travel-related transactions which have pushed many travel consumer transactions out of the scope of the existing regime;
  • the availability of credit card consumer remedies;
  • concerns about regulatory duplication;
  • the risk that the Fund may not be able to guarantee to compensate travel consumers in the event of a major business collapse; and
  • the compliance costs associated with the Fund.

Participating States and Territories have already begun to implement these changes which are scheduled to take effect on 30 June 2014:

  • in Victoria, the Travel Agents Repeal Bill 2013 (Vic) was assented to 18 March 2014, which repeals the Travel Agents Act 1986 (Vic);
  • in Queensland the Construction and Tourism (Red Tape Reduction) and Other Legislation Amendment Bill 2014 (Qld) was introduced into the Queensland Parliament on 18 March 2014 with the same intention; and
  • in New South Wales, the Travel Agents Repeal Bill 2013 was introduced into Parliament on 14 November 2013 and is currently before the Legislative Council.

In its submission in response to the COAG Legislative and Governance Forum on Consumer Affairs consultation in respect of the draft Transition Plan, the Australian Federation of Travel Agents (AFTA) proposed itself as the appropriate body to develop and administer the voluntary accreditation scheme and industry code of conduct. In doing so, AFTA pointed to its longstanding reputation as the peak body representing Australian travel agents and its role in handling complaints. AFTA subsequently received a COAG grant of $2.8 million (taken from the Fund's reserves of over $30 million) to assist in funding the new scheme – the AFTA Travel Accreditation Scheme (ATAS). AFTA had initially formally requested $6 million to establish ATAS.

While AFTA are still in the process of finalising the development of ATAS, AFTA has stated that ATAS is intended to commence from 1 July 2014. AFTA has also indicated that applications for ATAS accreditation will open in May 2014. While AFTA has revealed some information as to how ATAS will operate, including a set of "frequently asked questions",4 AFTA has not as yet publicly released the proposed voluntary industry code of conduct. We understand that the ATAS voluntary industry code of conduct is currently going through a process of industry consultation and will be released prior to commencement of ATAS on 1 July 2014.

The purposes of a voluntary industry code of conduct

Voluntary industry codes of conduct operate as a contract between participants who voluntarily agree to be bound by them. This is in contrast to a code of conduct which is "prescribed" by law, and which has mandatory effect on certain classes of business operator. Voluntary industry codes reflect an industry self-regulatory approach and are ordinarily designed to set acceptable standards and practices to meet industry and consumer expectations.

The Australian Competition and Consumer Commission's (ACCC's) Guidelines for developing effective voluntary industry codes of conduct identifies a number of key benefits of voluntary industry codes, including:

  • greater industry transparency;
  • greater stakeholder and investor confidence;
  • ensuring compliance with the CCA (including the Australian Consumer Law);
  • providing a competitive marketing advantage to participants;
  • providing greater flexibility than governmental regulation;
  • being less intrusive than governmental regulation;
  • encouraging participants to have a greater sense of "ownership";
  • acting as quality control within an industry; and
  • providing for complaints handling mechanisms which are more cost effective, time efficient and user friendly.5

Voluntary schemes and prospects for success

Whilst governments at present seem to favour a "light touch" approach to the regulation of the industry, it is uncertain whether the purposes of an industry code of conduct would be achieved through a voluntary scheme. The ACCC has found that voluntary codes of conduct tend to be more effective where the self-regulating body has widespread industry support, comprises all of the key stakeholders and operates an effective system of complaints. Voluntary schemes present particular issues in terms of administration, enforcement and compliance.

Whilst there is a perception that a voluntary scheme would be less costly than a mandatory code or regulation by government, this is not necessarily the case in light of the substantial costs associated with implementing, administering, enforcing and promoting the scheme. In particular, costs would include the remuneration of staff administering the code, establishing and operating a complaints committee as a quasi-tribunal, the ongoing administration and management of the scheme including record keeping and managing appeals and complaints and promoting the scheme. Additionally, there would be a substantial cost involved in probity investigations conducted on candidates seeking membership to the scheme.

The ability to enforce the voluntary scheme against its participating members where there is evidence of misconduct presents further issues. Without the force of legislation, the scheme would rely on the law of contract whereby enforcement would be difficult, costly and time consuming. For example, the costs of enforcement cannot be recouped through the imposition of fines as a sanction on scheme members. The sanctions that could be provided for in a voluntary scheme would arguably lack "teeth" to compel compliance. The most the code manager could sanction would be expulsion from the scheme and revocation of the right to use a certification or accreditation trade mark. The scheme member would thus remain free to continue to operate in a manner contrary to the standards set out in the scheme, damaging the reputation of Australia's tourism industry brand.

There is the potential to have a voluntary code prescribed under section 51AE of the CCA such that the voluntary code would be enforceable under the CCA. Whilst this option would strengthen the effectiveness of the regime in terms of enforcement, it seems unlikely that the relevant minister6 would consider prescribing the voluntary scheme at the outset. Generally, the relevant minister will only consider initiating a proposal for prescription where has been an identified market failure, deficiencies in an existing code or system enforcement issues. In order to draw these conclusions, the voluntary scheme would need to operate for a period such that evidence of its inadequacy came to light. Indeed, at the time the Transition Plan was adopted, no voluntary codes had been prescribed.

In light of the significant administrative costs of such a voluntary scheme, which may be passed onto code members, many tourism industry participants, especially the small operators which characterise the industry, may choose not to participate. Further, the accreditation process to be implemented as part of ATAS is likely to be undertaken with some rigour and at some administrative cost. Despite this, there is therefore a real risk that rogue operators will be able to avoid accreditation by choosing not to participate in ATAS with no apparent ramifications.

These apparent weaknesses in the voluntary scheme model translate into consumer vulnerability and dissatisfaction especially in the case of international tourists. There has been concern expressed in the industry that the current consumer law protection offered at the State and Federal level are insufficient to deal with the difficulties faced by foreign tourists in making complaints as well as the move towards online bookings. In the absence of the Fund to support aggrieved consumers, international tourists may find it difficult to navigate the Australian legal system to enforce their rights. The model currently being pursued does not appear to serve the interests of a first class tourism industry.

Where a voluntary industry code of conduct binds participants to standards of conduct that may contravene the competition provisions of the CCA, the voluntary industry code must be authorised by the ACCC. The ACCC will ordinarily authorise industry codes where the public benefit of a code outweighs its detriment. It is understood that AFTA will not be seeking ACCC authorisation of ATAS. Accordingly, industry participants and observers will be watching closely to see whether ATAS will have any real, market-altering effect for the benefit of the Australian tourism industry.


Although one of the motivations for these reforms were concerns about regulatory duplication and the availability of alternative remedies, including under the CCA, the risks presented by these reforms are particularly acute in relation to international tourists who may not be aware of remedial avenues such as the general consumer protection measures contained in the CCA.

Regulators and industry players should be careful to ensure that the regime which emerges maintains Australia's high standard of service delivery and adequately protect the interests of international visitors.


1See Australian Government, Tourism Research Australia, 'State of the Industry 2013' (Update issue 1, 2013).
2Deloitte Touche Tohmatsu, 'Positioning for prosperity? Catching the next wave' (2014), available from (accessed 8 April 2014).
3The Queensland Government's DestinationQ policy for example is committed to increasing visitor expenditure to $30 billion per annum by 2020.
4Australian Federation of Travel Agents, 'Frequently Asked Questions' (2014), (accessed 8 April 2014).
5Australian Competition and Consumer Commission, 'Guidelines for developing effective voluntary industry codes of conduct' (July 2011), at page 3.
6The Treasury's Policy Guidelines on Prescribing Industry Codes under part IVB of the Competition and Consumer Act 2010 (May 2011) provides that the Parliamentary Secretary to the Treasurer is the relevant minister.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Tom Young
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions