Source: Hong Kong Government special administrative region
LCQ14: Operating situation of hotel industry
Question:
The Government has resumed the collection of hotel accommodation tax (HAT) with effect from January 1, 2025. Regarding the operating situation of the hotel industry, will the Government inform this Council:
(1) of the following information regarding hotels and guesthouses in Hong Kong in each month since July 2025: (i) the number of hotels and guesthouses and (ii) the total number of rooms provided (broken down by whether or not HAT has been charged), as well as (iii) the amount of HAT collected by the Government (set out in a table);
(2) given that HAT has been in effect for one year, whether the Government has reviewed if the revenue from HAT meets expectations; if it has not, the reasons for that;
(3) of the number of hotel or guesthouse projects currently proposed or under construction with building plans approved by the Building Authority; among such projects, of (i) the number of projects currently under construction and the number of rooms involved (broken down by the anticipated year of completion), (ii) the number of projects which have been shelved or without expected completion dates, and (iii) the number of new projects with building plans approved in the past two years, as well as the total number of rooms expected to be provided;
(4) whether an assessment will be conducted and targets will be set for the supply of hotel and guesthouse rooms over the next five years; if so, of the measures put in place to achieve the relevant targets;
(5) whether it has compiled statistics on the number of hotels or guesthouses that applied for change of use in the past three years, as well as their modified uses and the number of rooms involved;
(6) given that the Government indicated in its reply to my written question on September 10, 2025 that HAT formed part of the Government’s general revenue and that the Government would consider the needs of different policy areas and holistically consider how to allocate resources, while some members of the hotel industry have relayed that the industry faces intense competition, whether the authorities will consider using the revenue from HAT to introduce targeted measures to promote the upgrading and transformation of the hotel and guesthouse industry (such as subsidising smart hotel facilities or green certification) and enhance the industry’s long-term competitiveness; if so, of the details of the plan; if not, the reasons for that; and
(7) given that the Government indicated in its written reply mentioned in (6) that it currently had no plan to adjust the HAT rate, while some members of the hotel industry have relayed that the operating environment is very difficult, will the Government reconsider the industry’s proposal to reduce or suspend the collection of HAT; if so, of the details; if not, the reasons for that?
Reply:
President,
The hotel accommodation tax (HAT) is imposed on hotels and guesthouses under the Hotel Accommodation Tax Ordinance (Cap. 348) (the Ordinance). To tie in with the Government’s fiscal consolidation programme, we resumed the collection of HAT at a rate of 3 per ceent of the accommodation charge with effect from January 1, 2025.
Upon consultation with the Culture, Sports and Tourism Bureau, the Development Bureau, the Inland Revenue Department (IRD) and the Home Affairs Department, my reply to the Hon Yiu Pak-leung’s question is as follows:
(1) The number of hotels and guesthouses in Hong Kong and the total number of rooms provided by them by month from July 2025 to February 2026 are as follows:
| Month(Number of rooms)^(Number of rooms)(86 420)(3 253)(6 482)(9 573)(92 902)(12 826)(85 735)(3 259)(7 345)(9 537)(93 080)(12 796)(86 243)(3 504)(7 435)(9 535)(93 678)(13 039)(86 284)(3 515)(7 387)(9 551)(93 671)(13 066)(86 345)(3 515)(7 387)(9 546)(93 732)(13 061)(86 093)(3 498)(7 639)(9 544)(93 732)(13 042)(86 097)(4 245)(7 639)(9 592)(93 736)(13 837)(86 201)(4 220)(7 135)(9 217)(93 336)(13 437) # Including hotels or guesthouses exempted from paying HAT under the Ordinance, i.e. (a) the rate of the accommodation charge is less than $15 per day; (b) the accommodation is provided by societies not established or conducted for profit; or (c) the hotel or guesthouse contains less than 10 rooms normally available for lodging guests. Under the Ordinance, HAT is levied quarterly and hotel and guesthouse proprietors should pay the tax to the IRD within 14 days after quarter-end. The HAT collected by the Government for the third and fourth quarters of 2025 amounted to about $180 million and $240 million respectively. (2) and (7) The Government fully took into account the impact of the tax on visitors and the industry when it decided to resume the collection of HAT. Since HAT only constitutes 3 per cent of hotel/guesthouse room rates and is levied on an ad valorem basis, it only accounts for a small portion of the total spending of overnight visitors in Hong Kong. We do not consider that it will affect visitors’ interest to visit Hong Kong as a travel destination. According to the statistics of the Hong Kong Tourism Board (HKTB), the average hotel occupancy rate and the number of overnight visitors for 2025 increased by around 2 per cent and 6 per cent respectively when compared to 2024. The revenue from HAT is affected by multiple factors, including the number of hotels and guesthouses subject to HAT, occupancy rates and room rates and whether long-term accommodation is provided. The HAT provides a stable source of Government revenue without affecting the general public. The Government considers that the collection of HAT was smooth in the past year and is in line with the policy objectives. Hence, the Government currently has no plan to adjust the HAT rate. (3) The information on hotel projects with building plans approved and consent to the commencement of works given by the Building Authority in the past two years is as follows:
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