Drop hotel tax, industry chiefs urge

By Sandy Li and Raymond Ma
Copyright 2001 South China Morning Post Ltd.
Article date: October 19, 2001
 

Hotels struggling against a dramatic downturn in business since the September 11 terrorist attacks in the US called on the Government yesterday to drop its three per cent hotel accommodation tax for one year.

The suggestion was part of a package of proposals submitted to Tourism Commissioner Rebecca Lai Ko Wing-Yee to rejuvenate the industry.

Federation of Hotel Owners executive director Michael Li Hon-shing said the money could instead pay for staff training and promotional activities. Hong Kong's largest vocational education and training provider, the Vocational Training Council, welcomed the proposal.

To help revive the flagging industry, Mr Li said Hong Kong should consider building more night entertainment venues and possibly legalising casinos to entice business travellers to stay longer.

"It will be a great help to boost spending if they can stay one more night or even half a day," he said.

He said an offer of taking unpaid leave had been extended to staff at only one hotel, which mainly targeted the American and European market.

"Other hotels are still closely monitoring the market condition," he said after meeting Ms Lai.

Hotel operators would avoid laying off staff as long as they could keep their costs down and generate more revenue, Mr Li promised. "But jobs cannot be guaranteed if our business deteriorates," he said.

Mr Li expected hotel occupancy to drop at least 10 per cent from last year's 73 per cent.

Other short-term measures put forward by the federation included freezing hotel rateable values, suspension of Mandatory Provident Fund contributions for at least one year, the granting of entry visas to Taiwanese travellers upon arrival and speeding up electronic visa applications.

Medium-term proposals included eliminating or reducing airport departure tax from $80 to $50.

Mr Li said members also proposed setting up an official group of tourism ambassadors as well as additional tourist information counters.

Hong Kong Tourism Board executive director Simon Clennell said: "Getting people to come to Hong Kong in the first place is important, but once people get here it is well worth it to make sure they enjoy their stay."
 

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