Hong Kong Treasury Bureau: Hotel room tax does not affect travelers' intention to come to Hong Kong, no plans to adjust tax rates at this time.

On September 10, Mr. Christopher Hui, Secretary for Financial Services and the Treasury of Hong Kong, replied in writing to questions from Legislative Councilor Mr. Yiu Man Lai, stating that the government has taken into consideration the impact of reinstating the hotel accommodation tax on tourists and the industry. The hotel accommodation tax accounts for only 3% of hotel/guesthouse rental fees and is levied on an ad valorem basis. As this tax only represents a small portion of the total spending by overnight visitors in Hong Kong, the government believes it will not affect tourists' willingness to visit the city, and there are currently no plans to adjust the tax rate. Mr. Hui stated that since announcing the reinstatement of the hotel accommodation tax, the government has maintained close communication with representatives from the hotel and guesthouse industry and incorporated their opinions when formulating implementation details. It is understood that the industry does not face significant difficulties in filling out tax declaration forms and paying taxes, and the collection of the hotel accommodation tax has been generally smooth. In terms of revenue, the hotel accommodation tax collected in the first two quarters of 2025 accounts for approximately 37% of the annual budget at 970 million HK dollars. Due to historical data showing higher hotel occupancy rates in the second half of the year and the tax's adjustment with rental fees, the final revenue from the hotel accommodation tax for this fiscal year will depend on the total number of overnight visitors and rental prices. Mr. Hui mentioned that as the tax only represents a small portion of total spending by overnight visitors in Hong Kong, he believes it will not impact tourists' willingness to visit. According to statistics from the Hong Kong Tourism Board (HKTB), the average hotel occupancy rate and number of overnight visitors in the first half of 2025 have increased by about 2% and 7%, respectively, compared to the same period in 2024. In fact, tourists consider various factors when choosing a travel destination, including the attractiveness of the destination. The government will continue to enrich Hong Kong's tourism products and experiences, develop more distinctive tourism routes, host various events, and encourage hotels to collaborate with attractions and event organizers to offer accommodation packages and discounts to attract more tourists to visit and spend more days in Hong Kong. He also mentioned that to further enhance efficiency and convenience for citizens and the industry in tax payment, the Inland Revenue Department has been utilizing information technology to improve services. The department is actively exploring ways to optimize the declaration process for the hotel accommodation tax, including using electronic tax filing to reduce administrative work for the industry. Regarding the use of hotel accommodation tax revenue, Mr. Hui stated that like other taxes, the revenue from the hotel accommodation tax will be used for general government income. The government will consider how to allocate resources appropriately across different policy areas based on prudent financial management principles. He stated that the government is fully committed to promoting the overall development of the tourism industry and the hotel/guesthouse sector. In the 2025-26 fiscal year, the government has invested over 1.23 billion HK dollars to focus on developing the tourism industry, implementing the concept of "tourism everywhere" and the "Hong Kong Tourism Industry Blueprint 2.0". Through various measures, the government aims to attract visitors to Hong Kong, such as hosting and supporting events, optimizing waterfront facilities, promoting exhibitions and rewarding tourism, supporting cruise development, enhancing promotion for visitors from the Middle East and ASEAN countries, and promoting smart tourism and optimizing platforms to enhance the tourist experience. The government will continue to invest resources through the HKTB to strengthen promotion and enhance Hong Kong's attractiveness to tourists.