Malaysia Tourism Agency Association president Khalid Harun said only qualified and financially stable agencies should be permitted to practise as travel agents.

Agencies must be financially sound so that “if any of the passengers are stranded, the agencies can rescue them on the spot”, he told FMT.

He urged the government to consider raising the agency guarantee for licensed tour operators from RM20,000 to RM100,000.

Khalid said there must be a shift in payment practices. Travel agents must abandon deposit collection in favour of full payment upon package confirmation.

“When you sell your package with full payment, you collect it at the shop. You no longer have to collect a deposit as everything has been confirmed,” he said.

Malaysian Association of Tour and Travel Agents president Nigel Wong said the tourism, arts and culture ministry should ensure existing agencies are licensed.

He said there were many unlicensed businesses cluttering the market, allowed to operate with near-impunity, especially online.

Wong also said the Tourism Industry Act 1992 needed overhauling to ensure effective regulation and growth within the industry. “We need more effective joint enforcement between government agencies and punishments need to be harsher – with jail time in addition to fines,” he said.

Last month, tourism, arts and culture minister Tiong King Sing said the ministry would vet travel agencies offering umrah packages following multiple reports of companies scamming pilgrims.

Tiong said the licences of several travel agencies were revoked after they were found to have cheated their customers, including failing to provide the services promised.

He said there had been multiple reports of pilgrims duped by travel agencies over the past few years, with numerous police reports lodged by victims who claimed collective losses in the millions of ringgit.