THE Ministry of Tourism, Arts and Culture is holding discussions with the Ministry of Finance on a proposal to allow travel agents and tour operators to provide insurance guarantees as an alternative to bank guarantees, in a move aimed at enhancing consumer protection and restoring trust in the travel industry.
Tourism Minister Datuk Seri Tiong King Sing said the proposal was prompted by a surge in complaints against several Umrah travel operators, raising concerns over consumer losses and confidence in the sector.
He announced the ongoing discussions during the Malaysian Association of Tour and Travel Agents Membership Summit 2026.
“I have been talking to the Minister of Finance to look into this and allow travel agents or tour operators to use insurance guarantee,” he said, adding that the change would not take effect immediately as consultations were still underway.
In a statement issued on Jan 18, the ministry said it was reviewing the current requirement for Umrah package operators to furnish a minimum bank guarantee of RM250,000, citing increasingly serious and frequent cases of consumer fraud.
Under the proposed framework, larger operators would be required to provide higher bank guarantees, calibrated according to the size and scale of their operations.
Tiong stressed that the measures were designed to protect consumers rather than penalise legitimate businesses, and called on MATTA to play an active role in explaining the rationale behind the changes to its members.
Acknowledging concerns within the industry over tighter requirements, he apologised for the inconvenience caused, saying the decision was driven by the high volume of complaints received.
He explained that enforcing bank guarantee requirements, particularly for outbound travel operators, was intended to ensure swift refunds to affected consumers should problems arise.
He also warned that Malaysia’s tourism industry must not sacrifice standards and consumer trust in the pursuit of growth. According to Tiong, trust is fundamental to the sector’s long-term success, as visitor confidence directly influences repeat visits, recommendations and the country’s reputation as a global tourism destination. - January 22, 2026
