Hong Kong Treasury: Levying hotel room tax aligns with policy goals, no plans to adjust hotel room tax rates at present.

On March 18, Secretary for Financial Services and the Treasury of Hong Kong, Christopher Hui Ching-yu, stated during a Legislative Council meeting in response to a question from lawmaker Yiu Si-wing that the actual revenue from hotel room tax is affected by multiple factors, including the number of hotels and guesthouses subject to the tax, occupancy rates, room rates, and whether long-term accommodation is provided. The hotel room tax provides a stable source of income for the government without affecting the general public. The government believes that the operation of collecting hotel room tax over the past year has been smooth and in line with policy objectives, therefore there are no plans to adjust the tax rate at the moment. Hui pointed out that the hotel room tax is levied on hotels and guesthouses under the Hotel Accommodation Tax Ordinance (Chapter 348). To support the government's fiscal consolidation plan, Hong Kong will resume collecting the hotel room tax starting January 1, 2025, at a rate of 3% of the room rate. According to the ordinance, the tax is collected quarterly, and hotel and guesthouse owners must pay the tax due to the Inland Revenue Department within 14 days after the end of each quarter. The government collected approximately HK$180 million and HK$240 million in hotel room tax for the third and fourth quarters of 2025 respectively. He stated that the government carefully considered the impact of the tax on tourists and the industry when deciding to resume collecting the hotel room tax. As the hotel room tax accounts for only 3% of the hotel or guesthouse room rate and is levied on an ad valorem basis, it only represents a small portion of overnight tourist expenses in Hong Kong, which he believes will not affect tourists' willingness to visit Hong Kong. According to statistics from the Hong Kong Tourism Board, the average hotel occupancy rate and overnight tourist arrivals in 2025 increased by approximately 2% and 6% respectively compared to 2024. According to the Hong Kong Tourism Board, as of September 2025, there were 23 new hotel projects under construction with completion dates to be determined, expected to provide a total of 4,456 hotel rooms. The government will closely monitor the supply of hotel accommodation and regularly publish relevant data for developers and the industry to make appropriate business plans. The government welcomes any projects that will contribute to the sustainable development of the tourism industry in Hong Kong, and supports plans to provide more accommodation rooms and tourism facilities for tourists. He continued to point out that the hotel room tax, like other taxes, will be allocated to the general revenue of the government. The government will allocate financial resources appropriately based on prudent financial management principles according to the actual needs of different policy areas. Hui emphasized that the government has been fully committed to promoting the overall development of the tourism industry and hotels. The 2026-27 Budget announced an allocation of HK$1.66 billion to the Tourism Board to strengthen the promotion of the Hong Kong tourism industry to potential source markets, such as Mainland cities outside Guangdong Province, ASEAN countries, the Middle East, among others, through various measures to enhance Hong Kong's attractiveness to tourists and attract more overnight visitors to stay in Hong Kong.