Monday, January 20, 2025 Starting in January 2025, Hong Kong will reintroduce a hotel accommodation tax (HAT) of 3% as part of a fiscal strategy to address the city’s deficit, following years of high spending during the Covid-19 pandemic. The move has sparked debates within the tourism industry about how it might affect the city’s recovery and the broader travel landscape. While the tax is expected to generate significant revenue, it also raises questions about its impact on travelers, particularly in terms of accommodation costs.
Reintroduction of the Hotel Accommodation Tax The hotel accommodation tax, which had been suspended since 2008, will now apply to most hotel and guesthouse accommodations in Hong Kong. The financial secretary, Paul Chan Mo-po, explained that the tax was being reintroduced as part of the government’s fiscal consolidation program, aimed at addressing the budgetary deficits accumulated during the pandemic. The 3% tax is projected to bring in up to HK$1.
1 billion (US$140 million) annually, contributing to the city’s economic recovery. Industry experts have mixed opinions on the impact this will have. Balwin Yeung, vice president of sales and marketing at Regal Hotels International, noted that while the tax would take some time to implement smoothly, it is a common practice worldwide, and most stakeholders will adapt within a month.
He pointed out that the introduction of such a tax could lead to slight changes in guest expectations, especially f.
