Hoteliers' anger at steep rises in property rates
Increase branded 'unreasonable' after sluggish 'golden week' points to testing times for industry
Hotel bosses say they face "unreasonable" increases in their government rates, with some being asked to pay as much as 50 per cent more than last year.
The Federation of Hong Kong Hotel Owners has demanded an explanation from the Rating and Valuation Department, saying the rises will add to pressure on the industry, especially after a sluggish "golden week" holiday.
"For a regular-sized hotel … the annual net profit margin may be as small as 10 per cent, and the economic outlook is not optimistic this year. But the government thinks the performance is as good as [an increase of] 50 per cent," said the federation's executive director, Michael Li Hon-shing.
For a regular-sized hotel … the annual net profit margin may be as small as 10 per cent, and the economic outlook is not optimistic this year
Hotels' property rates are assessed based on an undisclosed formula including gross receipts, profit and room rates and the outlook for tourism. Rates vary widely by hotel, but a typical four-star hotel with 400 rooms could pay more than HK$30,000 a quarter, said one hotelier.
Last year, the median rates for 2,000 hotels, hostels and guest houses were 30 per cent more than in 2011, Li said, with top hotels paying 36 per cent more.
The increases in hotels' property rates come after two bumper years for the industry.