THE Government has come under mounting pressure to change its hotel development land-use policy with another consultancy report calling for steps to make it more financially viable. The Federation of Hong Kong Hotel Owners paper, to be released soon, comes at a time when there are fears that a shortage of hotel rooms could harm the tourism industry. The shortage was being exacerbated because tourist numbers were steadily increasing but hotel room stock was decreasing because property owners were redeveloping existing hotels into offices. The tourism industry is the second largest foreign exchange earner in Hong Kong, bringing in $64.3 billion last year. The federation's paper, written by PKF Consulting, says Hong Kong would need a net gain of at least 14,000 new hotel rooms in the next 10 years. PKF said zoning regulations, plot-ratio rules and the labour importation scheme held the key to continued hotel development. The consultants suggest the Government quickly increases the plot ratio for hotel development to the same allowed for offices and designate sites specifically for hotels. Unlike other big cities in the Asia-Pacific region, Hong Kong has different plot ratios for hotels and office buildings. Hotels are classified as domestic properties, entitled to a plot ratio of eight to 10 instead of 15 as enjoyed by non-domestic and commercial buildings. The consultants suggested the Government remove the anomaly. They were expected to recommend that the Government use zoning controls to encourage hotel development in strategic locations. The paper shared many broad principles with a consultancy report commissioned by the Hong Kong Tourist Association and the Planning Department. These included the relaxation of plot ratios, zoning sites specifically for hotels and the removal of constraints on the industry, including licensing and regulations. The consultants said the Government should allow the hotel industry to bring in more foreign labour because hoteliers found it increasingly difficult to recruit staff. They said the exorbitant increase in hotel licence fees should be dropped. The consultants called on the Government to consider giving hotel investors tax holidays in light of high operating costs and long payback periods.