LCQ14: Operating situation of hotel industry
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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 hotels and guesthouses subject to HAT (Number of rooms)^ |
Number of hotels and guesthouses not subject to HAT# (Number of rooms) |
Total | |||
| Hotel | Guesthouse | Hotel | Guesthouse | Hotel | Guesthouse | |
| 2025 | ||||||
| July | 302 (86 420) |
138 (3 253) |
34 (6 482) |
1 323 (9 573) |
336 (92 902) |
1 461 (12 826) |
| August | 302 (85 735) |
139 (3 259) |
36 (7 345) |
1 316 (9 537) |
338 (93 080) |
1 455 (12 796) |
| September | 303 (86 243) |
137 (3 504) |
37 (7 435) |
1 315 (9 535) |
340 (93 678) |
1 452 (13 039) |
| October | 304 (86 284) |
135 (3 515) |
36 (7 387) |
1 316 (9 551) |
340 (93 671) |
1 451 (13 066) |
| November | 305 (86 345) |
135 (3 515) |
36 (7 387) |
1 315 (9 546) |
341 (93 732) |
1 450 (13 061) |
| December | 303 (86 093) |
134 (3 498) |
38 (7 639) |
1 314 (9 544) |
341 (93 732) |
1 448 (13 042) |
| 2026 | ||||||
| January | 303 (86 097) |
137 (4 245) |
38 (7 639) |
1 314 (9 592) |
341 (93 736) |
1 451 (13 837) |
| February | 303 (86 201) |
136 (4 220) |
32 (7 135) |
1 283 (9 217) |
335 (93 336) |
1 419 (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:
| 2024 | 2025 | |
| Number of approved hotel projects (number of rooms)* |
4 (703) |
4 (1 187) |
| Number of projects with works commenced (number of rooms) |
0 (0) |
1 (513) |
The approved hotel projects and the projects with works commenced have not yet been completed. The Buildings Department does not maintain records of hotel projects that have been shelved or information related to guesthouses.
(4) According to statistics from the HKTB, as at September 2025, there were 23 ongoing new hotel construction projects with exact completion date yet to be determined, which are expected to provide a total of 4 456 hotel rooms in the future.
The Government will closely monitor the supply of hotels in the market, and regularly release relevant statistics for reference of the industry and developers, so as to assist their formulation of appropriate business plans. The Government welcomes initiatives that are conducive to the sustainable development of the tourism industry in Hong Kong, and will support initiatives that would provide more hotel rooms and tourism facilities to our visitors.
(5) The Government does not maintain statistics on the number of hotels or guesthouses for which application for change of use has been made.
(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 the appropriate allocation of financial resources in accordance with the principle of prudent financial management.
The Government has been fully committed to promoting the overall development of the tourism and hotel industries. The 2026-27 Budget has allocated $1,660 million to the HKTB to support its work on external promotion of Hong Kong's tourism industry including stepping up marketing efforts in source markets with potential, such as Mainland cities outside Guangdong, as well as emerging markets such as ASEAN (Association of Southeast Asian Nations) and the Middle East, to attract through various initiatives more overnight visitors to visit and stay in Hong Kong.
Ends/Wednesday, March 18, 2026
Issued at HKT 14:48
Issued at HKT 14:48
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