Chinese Economics

Zero-fee tour is a marketing activity provided by many travel agencies around the world and has been a very hot issue in Hong Kong recently (Ho,2011). Generally, zero-fee tour means that the travel agencies such as golden win international travel services limited, charge a extremely low tour fee or even zero fee as a marketing strategy to attract tourists to enter a tour. Then the tour guides will arrange the tourists to the designated stores, which are owned by the agencies or have the commission arrangements with the agencies, and force the tourists to buy products at inflated prices. If tourists have not done "enough" shopping, the tour guides will abandon them. The tour guides and the operators receive the commissions provided by the stores as their main source of income.

Usually, the main source of income of the travel agencies comes from the tour fees. However, the travel agencies which offer zero-fee tour can only earn commissions from stores which have an agreement with them. In addition, most of the tour guides in this industry do not have basic salaries and they also depend on commissions from shops for a living. The greater amount the tourists shop from the stores, the greater commissions the agencies and the tour guides can receive. Thus, the travel agencies and the tour guides both have great incentives to force the tourists to shop at the designated stores.

I believe that the zero-fee tour is an unethical marketing activity which should be modified by the industry. First, it is unreasonable for the travel agencies to offer zero-fee tour as the agencies earn mainly from the tour fees and they may need to pay the expenses of transportation and accommodation. How can these travel agencies maintain in the industry if they offer zero-fee tour ? Surely, there is no free lunch in the world (Brendan, 2003). It is highly expected that the agencies will use other methods to capture the revenues. As a result, the agencies force the tourists to shop at the designated stores and buy products at overstated prices to replace the tour fees. Second, price is everything a buyer gives up in exchange for the product or service and the key to determining prices is to figure out how much customers are willing to pay and assess whether a profit can be made at that point. But the travel agencies promote their tours as a zero-fee to attract people to join their tours and these people end up by buying luxuries such as jewellery at inflated prices involuntarily. Therefore, the agencies are actually using very low price or even zero price to mislead the customers as the tourists joining the zero-fee tour may even spend more money than the tourists joining the normal one.

To decide whether the zero-fee tour is an unethical marketing activity or not, stakeholder-oriented framework can be used to analyze. This framework analyses ethical problems on the basis of whom they affect (Katsoulakos, 2007,p. 362-364). In this case, the tourists, the stores, the tour guides , the travel agencies and even the society as a whole are the stakeholders .The tourists are the main victims who pay a huge amount of money on buying expensive products involuntarily. The stores