Hong Kong guest-house owners say new licensing rules will run them out of business

Proposed changes to hostel licensing laws threaten the survival of Hong Kong's guest houses and will affect tourism in the city, guest-house operators say.

In a special meeting with the Legislative Council panel on home affairs yesterday morning, the operators condemned the government's proposal to ban guest houses from being run in residential buildings that do not allow temporary accommodation or commercial activities.

The operators say the ban would be a big blow to the guest-house industry. It would also affect the supply of accommodation for tourists, they say, as guest houses provide some 8,000 rooms - or about 10 per cent of all the city's temporary lodgings.

"Since the Individual Visit Scheme started in 2003, the number of tourists has been going up, and they have a big demand for accommodation. Occupancy rates for hotel and guest-house rooms have always exceeded 80 per cent," Tai Lei-na, owner of Ah Shan Hostel in Mong Kok, said.

"If there is no more cheap accommodation, tourists may switch to Taiwan, where hostels are immensely popular."

Other operators said they had invested heavily in converting flats into guest houses and that their investments would be worthless if the government changed the rules and refused to renew their licences.

In a public consultation that ended last month, the Home Affairs Bureau proposed plugging a loophole in the law that has seen about 200 guest houses receive licences from the government despite being situated in buildings that allow neither temporary accommodation nor commercial activities.