LCQ9: Hotel accommodation tax
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Question:
The Government has resumed the collection of hotel accommodation tax (HAT) at a rate of 3 per cent on the accommodation charges with effect from January 1 this year. However, some members of the hotel and guesthouse industry are of the view that, given the rising operating costs, fierce competitions from the nearby markets and the significantly heightened sensitivity to hotel accommodation charges among visitors, the Government should continue to pay attention to and assess the impact of reinstating HAT on the industry. In this connection, will the Government inform this Council:
(1) whether it has compiled statistics on the following information regarding hotels and guesthouses in Hong Kong in each month from January to June this year: (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) whether it has compiled statistics on the number of rooms which are considered as long-term accommodations among those set out in (1) on which HAT is not charged (set out in a table on a monthly basis);
(3) whether it has reviewed if the collection of HAT after its reinstatement meets expectations, and how it assesses the impact of reinstating HAT on the competitiveness of hotels in Hong Kong;
(4) as it is learnt that the authorities have indicated that HAT is not part of the hotel room tariffs, and they have urged online travel platforms (OTP(s)) not to calculate the commissions payable by hotels and guesthouses based on the room rates with HAT, whether the authorities have compiled statistics on the number of OTPs which are still calculating the commissions concerned based on the tax-loaded room rates at present; of the measures put in place by the authorities to promote OTPs to calculate commissions based on the room rates without HAT;
(5) whether it will consider introducing electronic filing of documents to facilitate hotels and guesthouses in making returns in respect of their payable HAT, thereby reducing the administrative workload of the industry;
(6) whether it has plans to make good use of the HAT revenue to promote the upgrading and transformation of hotels and guesthouses to enhance competitiveness of the industry; if so, of the details of the plans; if not, the reasons for that; and
(7) since some members of the hotel industry are of the view that they are facing intense competition and have proposed reduction or suspension of the collection of HAT by the Government, will the Government consider such proposals; 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). The Government resumed the collection of HAT at a rate of 3 per cent with effect from January 1, 2025, as part of its comprehensive fiscal consolidation programme.
Upon consultation with the Culture, Sports and Tourism Bureau and the Inland Revenue Department (IRD), my reply to Hon Yiu Pak-leung's question is as follows:
(1) and (2) The number of hotels and guesthouses in Hong Kong and the total number of rooms provided by them from January to June 2025 are as follows:
| Number of hotels and guesthouses subject to HAT (Number of rooms)^ |
Number of hotels and guesthouses not subject to HAT# (Number of rooms) |
Total | ||||
| 2025 | Hotel | Guesthouse | Hotel | Guesthouse | Hotel | Guesthouse |
| January | 301 (86 348) |
148 (3 245) |
32 (6 341) |
1 318 (9 165) |
333 (92 689) |
1 466 (12 410) |
| February | 302 (86 410) |
147 (3 231) |
31 (6 240) |
1 312 (9 159) |
333 (92 650) |
1 459 (12 390) |
| March | 302 (86 410) |
147 (3 227) |
31 (6 240) |
1 315 (9 157) |
333 (92 650) |
1 462 (12 384) |
| April | 302 (86 410) |
142 (3 171) |
32 (6 358) |
1 323 (9 211) |
334 (92 768) |
1 465 (12 382) |
| May | 302 (86 422) |
135 (3 171) |
32 (6 358) |
1 327 (9 301) |
334 (92 780) |
1 462 (12 472) |
| June | 302 (86 420) |
137 (3 238) |
32 (6 358) |
1 325 (9 591) |
334 (92 778) |
1 462 (12 829) |
# 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 society 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 Government within 14 days after quarter-end. The HAT collected by the Government for the first and second quarters of 2025 amounted to about $190 million and $170 million respectively.
(3) Since the announcement of resumption of collection of HAT, the Government has maintained close communication with the representatives of the hotel and guesthouse industry. We assisted the industry in understanding the operational arrangement of HAT through meetings, briefings and a communication platform, and incorporated the industry's feedback when formulating the implementation details. The IRD has updated the relevant information and frequently asked questions on their website from time to time, and set up a telephone enquiry hotline and a dedicated helpdesk at the Inland Revenue Centre to provide information to the industry, general public and visitors. The IRD also visits hotels and guesthouses from time to time to see if the industry has any problems in completing the returns and making tax payments, and to provide assistance and clarifications. We understand that the industry has no major difficulties in completing the returns and making tax payment. The Government's work on HAT collection has been generally smooth.
In terms of tax revenue, the HAT collected for the first two quarters of 2025 accounts for around 37 per cent of the annual estimate of $970 million. According to past data, the hotel occupancy rates in the second half of the year are generally higher than those in the first half. Furthermore, the HAT that can be collected varies with adjustments in room rates. Hence, the final revenue from HAT for this financial year will depend on the total number of overnight visitors and room rates throughout the year.
The Government fully took into account the impact of the tax on visitors and the industry when considering the resumption of collection of HAT. HAT only constitutes 3 per cent of hotel/guesthouse room rates and is levied on an ad valorem basis. Since the relevant tax 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' wish to consider 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 the first half of 2025 increased by around 2 per cent and 7 per cent respectively, compared to the same period in 2024. In fact, visitors take into account multiple factors when selecting travel destinations, including the appeal of the relevant places. The Government will continue to enrich Hong Kong's tourism products and experiences, develop distinctive travel itineraries, host different types of mega events and encourage hotels to collaborate with attractions and event organisers to provide accommodation packages and special offers, with a view to attracting more visitors to Hong Kong and extend their stays.
(4) Prior to the resumption of collection of HAT, the Government met with representatives from online travel agencies (OTAs) and issued emails to them to explain the operational arrangement of HAT. We clarified that, if OTAs collect HAT on behalf of the hotels or guesthouses, the tax amount should not be included in the calculation of commissions charged to hotels and guesthouses. Mainstream OTAs have followed the Government's appeal when handling the commissions with hotels and guesthouses.
(5) To further enhance operational efficiency and facilitate tax payments by the public and industries, the IRD has been making good use of information technology to improve their services. The IRD is actively exploring ways to improve the current filing process of HAT, including electronic filing, to reduce the administrative work of the industry.
(6) Similar to other taxes, HAT forms part of the Government's general revenue. The Government will consider the actual needs of different policy areas and holistically consider how to allocate resources in accordance with the principle of prudent financial management.
The Government is fully committed to promoting the overall development of the tourism industry and hotel/guesthouse industry. In a bid to pursue the concept of "tourism is everywhere" and implement the Development Blueprint for Hong Kong's Tourism Industry 2.0, the Government has allocated over $1.23 billion in 2025-26 financial year to prioritise tourism development. An array of measures will be implemented to attract visitors, which include hosting and supporting mega events in Hong Kong, enhancing harbourfront facilities, facilitating meetings, incentives, conventions and exhibitions tourism, supporting cruise development, stepping up publicity targeting Middle Eastern and ASEAN (Association of Southeast Asian Nations) visitors, as well as promoting smart tourism and refining the platform to enhance visitors' experiences. The Government will continue allocating resources to strengthen its promotional efforts through the HKTB, thereby boosting Hong Kong's appeal to visitors.
(7) In formulating any revenue measures, the Government will take into account the economic situation and development needs of Hong Kong, views from different sectors of the community and the Government's fiscal situation. The HAT provides a stable source of Government revenue without affecting members of the public. The Government currently has no plan to adjust the HAT rate.
Ends/Wednesday, September 10, 2025
Issued at HKT 12:52
Issued at HKT 12:52
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