Hong Kong collected HK$189 million (US$24.1 million) from a hotel tax on guests for the first quarter following its reintroduction, with industry leaders raising concerns as to whether a HK$1.1 billion annual income target can be met.
Industry veterans also called for more government support, saying the tax figures reflected that hotels were struggling and had been forced to reduce room rates to attract tourists.
The 3 per cent hotel accommodation tax, which applies to all patrons, was reintroduced on January 1 after being waived since 2008. The government announced the return of the tax last year and said it was expected to bring in HK$1.1 billion each year.
But in a reply to the Post last month, the Inland Revenue Department said HK$189 million in hotel tax had been received for the first quarter this year. Payments for the second quarter were not yet due, as of June.
“We aim to meet the government’s tax target, but we are concerned we might not be able to meet the target,” said Caspar Tsui Ying-wai, executive director of the Federation of Hong Kong Hotel Owners.
One challenge was the current economic downturn, which had prompted mainland Chinese tourists to favour cheaper travel options, in turn forcing the hotel industry to further reduce its prices to boost occupancy rates, he said.
