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Legal Update

Hong Kong Hotel Licence Fees Changes. MORE to COME!

18 June 2007
Mayer Brown JSM Legal Update

Summary

From 1 November 2007, the current schedules 1 and 2 of the Hotel and Guesthouse Accommodation (Fees) Regulations (Cap.349 sub. leg B) will be repealed and substituted by the newly revised schedules 1 and 2 (see Full Update below). The enforcement of the revised fees under the schedules will affect applicants interested in applying for:

(1) the issue of new licences; and

(2) the renewal of licences of existing hotels and guesthouses.

Full Update

The Hotel and Guesthouse Accommodation Ordinance (HAGAO) aims to provide a statutory licensing scheme to regulate the fire and building safety of hotels and guesthouses. The current schedule 1 and 2 will be repealed and substituted by the newly revised schedule 1 and 2 as set out below.

New Licences

Schedule 1 to the Hotel and Guesthouse Accommodation (Fees) Regulations (Cap.349B) specifies the fees to be payable for the issue of new licences under section 8 of HAGAO.

Licence Renewal

Schedule 2 specifies the fees to be payable for the renewal of existing licences under section 9 of HAGAO.

Annual Review

This fee revision is an annual exercise. Based on the 'user pays' principle, the administration is keen to ensure that it recovers the full-cost of providing the licensing regime.

With the likely pay increase among the civil servant workforce, perhaps we can expect the full-cost for the issue and renewal of licences of hotels and guesthouses to rise correspondingly.

As an observation, we can say in respect to this fees change that:

(1) the cost of issuing new licences for small hotels (i.e. 100 rooms or less) has increased (by between 10-20%).

(2) the cost of issuing new licences for larger hotels (i.e. over 100 rooms) has decreased (by between 2-14%).

(3) the cost of issuing renewal licences has generally increased (by no more than 10%) .

It is good news that hotel occupancies and average RevPar results are increasing to meet the additional costs!

SCHEDULE 1 [ss. 3(a) & 4(b)]

FEE PAYABLE UPON ISSUE OF LICENCE UNDER SECTION 8
OF THE ORDINANCE

Number of rooms in which accommodation is available

Fee for 12 months
$

Fee for 24 months
$

Fee for 36 months
$

Fee for 48 months
$

Fee for 60 months
$

Fee for 72 months
$

Fee for 84 months
$

1 - 3

4,570

5,720

6,580

11,100

13,350

14,900

17,050

4 - 5

4,760

5,970

7,370

11,800

14,250

16,800

18,450

6 - 9

6,900

8,840

10,800

16,250

19,450

21,550

23,500

10 - 20

12,600

14,600

16,600

22,250

25,450

27,450

30,550

21 - 30

19,650

21,850

24,050

29,800

33,200

35,000

38,250

31 - 40

26,050

28,400

30,750

36,650

40,150

41,800

45,150

41 - 50

33,850

36,300

38,700

42,800

46,250

49,650

53,150

51 - 100

40,250

41,000

43,400

49,300

52,850

56,450

60,000

101 - 200

56,350

58,650

61,000

66,200

69,500

72,800

76,100

201 - 300

61,750

64,300

66,800

72,250

75,750

79,250

82,750

301 - 400

67,050

69,800

72,600

78,250

82,000

85,750

89,500

401 - 500

72,850

75,850

78,900

84,850

88,850

92,850

96,850

over 500

80,450

83,900

87,400

93,750

98,200

102,700

107,100

SCHEDULE 2 [ss. 3(b) & 4(c)]

FEE PAYABLE UPON RENEWAL OF LICENCE UNDER SECTION 9
OF THE ORDINANCE

Number of rooms in which accommodation is available

Fee for 12 months
$

Fee for 24 months
$

Fee for 36 months
$

Fee for 48 months
$

Fee for 60 months
$

Fee for 72 months
$

Fee for 84 months
$

1 - 3

2,650

3,560

4,470

8,300

10,200

12,050

13,950

4 - 5

3,310

4,400

5,500

9,520

11,600

13,650

15,700

6 - 9

6,050

7,600

9,100

13,500

16,000

18,450

20,950

10 - 20

9,200

10,750

12,350

16,850

19,400

21,950

24,450

21 - 30

15,100

16,800

18,500

23,150

25,800

28,500

31,150

31 - 40

18,450

20,300

22,100

26,850

29,650

32,450

35,250

41 - 50

20,150

22,050

23,950

28,750

31,600

34,500

37,350

51 - 100

22,400

24,400

26,400

31,300

34,250

37,200

40,150

101 - 200

25,100

27,450

29,750

35,000

38,300

41,550

44,850

201 - 300

27,350

29,850

32,400

37,850

41,300

44,800

48,300

301 - 400

29,500

32,300

35,050

40,750

44,500

48,250

52,000

401 - 500

31,900

34,900

37,950

43,850

47,850

51,850

55,850

over 500

36,500

39,950

43,450

49,850

54,250

58,700

63,150

For the official revised schedules, please go to:

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