The impact of the Consumer Protection Act, 2008 on the accomodation segment of the tourism industry

Abstract

The tourism industry is critically important for the economic well-being of South Africa. This realisation elicited a greater focus on the industry, including greater government regulation thereof. Although the concept of a tourist (consumer of tourism services) will not readily conjure up someone in need of protection, tourists are often exposed to exploitation through unfair business practices. Tourists, by definition, are outside their normal places of residence and often strangers to the environment within which they find themselves. For the important tourism industry to achieve its economic potential the protection of the tourist must be paramount. The introduction of the Consumer Protection Act, 2008 in 2010 was heralded as a new dawn for consumers. The CPA provides consumers, including domestic and foreign tourists, with extensive consumer rights. As the CPA is the first comprehensive legislation aimed at consumer protection the impact of the Act is far from known. The CPA caused considerable uncertainty in the tourism industry establishing a clear need to determine its impact on the segments of the industry. This study focuses on the accommodation segment. The aim of the study therefore is to ascertain the impact of selected consumer rights on the accommodation segment of the tourism industry. An overview of the tourism industry reveals that tourists are becoming more experienced, demanding and discerning. The regulation of the industry is explained. Particularly relevant are latest developments in South Africa, particularly the Draft Tourism Bill, 2011 and the National Tourism Sector Strategy. The consumer protection regime applicable prior to the coming into effect of the CPA was characterised more by ad hoc legislative arrangements than any systematic programme of consumer protection. Consumers were reliant on the common law. However, as part of a larger scheme to improve the socio-economic well-being of the people of South Africa, the government introduced a number of statutes including the CPA. The CPA introduced wide-ranging rights for the protection of consumers and mechanisms to provide effective redress. Selected consumer rights are critically analysed to assess the impact of these rights on the accommodation segment. These include the consumer’s right to equality in the market place; the right to privacy; the right to cancel advance bookings; the right to documentation in plain language; the right to quality service; and the right that a supplier having possession of the property of guest must account for such property. Another important aspect relates to the use of exemption provisions. The use of exemption provisions by suppliers is severely curtailed by the CPA. The use of prepaid vouchers, trade coupons and similar promotions, and customer loyalty programmes are also considered and the rights and obligations for consumers and suppliers respectively are elucidated. Many of the rights considered will have a significant impact on accommodation establishments. Elsewhere the impact may not appear to be as significant as the CPA is merely codifying an existing right or remedy. However, codifying the right, providing examples of the conduct prohibited and providing enforcement mechanisms will increase the efficacy of these rights