Lu Shupei: Currently no plans to freeze hotel room taxes or adjust the tax rate

The Director of the Culture, Sports and Tourism Bureau, Lo Suk-pei, said when responding to a lawmaker’s question that the Government currently has no plan to freeze the hotel room rental tax or adjust the tax rate.

At a Legislative Council meeting, Chen Chung-yi, a member from the Election Committee subsector, said that in light of industry stakeholders pointing out that there is currently an oversupply of hotel rooms and that, due to a lack of bargaining power, the industry is forced to bear the hotel room rental tax expenditure itself, it is suggested that the Government freeze the hotel room rental tax until room demand exceeds supply—i.e., that the year-on-year growth in the industry’s “average revenue per available room for rent” exceeds 3%. In order to restore the tax collection reference conditions, he expressed concern whether the Government would study the proposal.

Lo Suk-pei replied that, to support the implementation of the fiscal consolidation plan and to increase Government revenue, the Government will resume collecting the hotel room rental tax starting from January 2025, with a tax rate of 3% of the rental. When deciding to resume collecting the hotel room rental tax, the Government has given full consideration to the impact of the tax on travelers and the industry. In 2025, the hotel average occupancy rate and the number of overnight visitors increased by about 2% and 6% respectively compared with 2024, reflecting that the hotel room rental tax has had little impact on travelers’ willingness to come to Hong Kong. In addition, the Government has always maintained communication with the industry regarding the collection of the hotel room rental tax. The Government understands that the industry’s operations in terms of compliance and tax payment are broadly smooth.

She said that the hotel room rental tax can provide the Government with a stable revenue source, and at the same time will not affect ordinary members of the public. In the 2025–26 financial year, the projected revenue from the hotel room rental tax is HK$770 million. The projected revenue for the 2026–27 financial year is HK$800 million. The Government currently has no plan to freeze the hotel room rental tax or adjust the tax rate.

During the Mainland Chinese New Year Golden Week, hotel occupancy rates reach 90%

Lo Suk-pei also said that in 2025, Hong Kong’s tourism performance was outstanding: the total number of visitors to Hong Kong for the year was nearly 50 million, up 12% from 2024, with the number of non-Mainland visitors increasing by 15%. This year, the momentum of tourism development continues to be strong. In the first three months, visitors to Hong Kong were 14.31 million, up 17% year on year. It is expected that the total number of visitors to Hong Kong for all of 2026 will reach 53.80 million, up by about 8% from last year.

As of the end of February 2026, there were 333 hotels in Hong Kong, providing a total of 93,481 rooms, and the number of rooms has continued to increase year on year. In 2025 as a whole, the average hotel occupancy rate was about 87%. During the Mainland Chinese New Year Golden Week in February, hotel occupancy rates were even more generally as high as 90%.