Outbound Package Tour Tipping:a Comparative Study Among Taiwan, Hong Kong And Mainland China

In package tour business, tourists usually need to leave discretionary sums of money (called "tips" or "service charge") to the tour leader, local guide and couch driver who served them apart from the prepaid tour price. Tipping phenomenon is closely related to outbound package tour pricing and the salary system of tour guide/tour escort, but also subjected to controversy and criticism. However, contrary to the growing number of outbound tourists and the increasing travel expenditure in China, tipping phenomenon did not attract enough attention from the academic community in mainland China. The current study finds that tipping is not only a typical economic exchange activity in the service industry, but also a social exchange activity and social psychological activity, which is discretionary, reciprocal and voluntary in nature. Package tour and restaurant as different service situation are distinct in terms of perceived identity of service giver, service relationship, service duration and the proportion of service value. Therefore, package tour tipping differs from restaurant tipping in terms of tip collection strategy, social norms, tip timing and tip’s relative magnitude. Tour operators bundle a range of individual service components to produce the package tour product, such as transportations, accommodations, meals, sightseeing tours, as well as tour escort and guide service. The price of tour escort/guide and coach driver services are then partitioned from the product bundles as surcharges. The controversy aroused by package tour tipping regulations in Hong Kong reveals that it is necessary to standardize the term "service charge" and "tip" There are possible opportunistic behaviors among travel agent, tour guide/escort and customers, which need to be taken into consideration when designing the package tour tipping regulations. The package tour tipping regulation ranges from the formal "service charge" regulation, the semi-formal "service charge" with "tipping" regulation, to the unformal "tipping" regulation. The new package tour contract delineated in the Tourism Law of mainland China, which is an example of the formal "service charge" regulation. With the tourism markets becoming regulated and matured, the professional quality of tour guide and escort improving, the outbound package tour customers getting more familiar with the tipping phenomenon, the travel agents in mainland China could and should reference to the practice of tipping regulations in Taiwan and Hong Kong to explore a suitable semi-formal "service charge" with "tipping" regulation.