Legislative Council

LC Paper No. CB(2)2570/98-99
(These minutes have been
seen by the Administration)

Ref : CB2/BC/4/98

Bills Committee on Hotel Accommodation (Miscellaneous Provisions) Bill 1998

Minutes of Meeting held on Thursday, 8 October 1998 at 10:45 am in Conference Room B of the Legislative Council Building

Members Present:

Hon CHAN Kam-lam (Chairman)
Hon HO Sai-chu, JP
Hon Edward HO Sing-tin, JP
Prof Hon NG Ching-fai
Hon James TO Kun-sun
Hon CHAN Wing-chan
Hon Howard YOUNG, JP
Hon YEUNG Yiu-chung
Hon CHOY So-yuk

Public Officers Attending:

Mr LEE Lap-sun
Deputy Secretary for Home Affairs

Mr Francis LO
Principal Assistant Secretary for Home Affairs

Mrs Alice LAU
Assistant Commissioner of Inland Revenue

Chief Officer, Office of the Licensing Authority Home Affairs Department

Ms Anastasia M H KWONG
Senior Government Counsel
Department of Justice
Clerk in Attendance:
Mrs Constance LI
Chief Assistant Secretary (2) 2
Staff in Attendance:
Miss Anita HO
Assistant Legal Adviser 2

Mr Stanley MA
Senior Assistant Secretary (2) 6

I. Election of Chairman

The Presiding Member, Mr James TO, called for nominations of the Chairman of the Bills Committee. Mr CHAN Kam-lam was nominated by Mr CHAN Wing-chan, and the nomination was seconded by Mr YEUNG Yiu-chung. Miss CHOY So-yuk was nominated by Mr NG Ching-fai, and the nomination was seconded by Mr Howard YOUNG. Both Mr CHAN Kam-lam and Miss CHOY So-yuk accepted the nomination.

2. As there were two nominations, Mr James TO ordered a vote. There was a tie vote and Mr James TO drew lots to determine his casting vote.

3. According to the lot drawn, Mr James TO declared that Mr CHAN Kam-lam was elected Chairman of the Bills Committee. Mr CHAN Kam-lam then took over the chair.

II. Meeting with the Administration
[Paper Nos. CB(2)190/98-99(01) and CB(2)241/98-99(01)]

4. At the invitation of the Chairman, Deputy Secretary for Home Affairs (DS for HA) briefed the meeting that the Bill was introduced to rectify deficiencies identified in three existing Ordinances, namely, the Hotel Proprietors Ordinance, the Hotel Accommodation Tax Ordinance and the Hotel and Guesthouse Accommodation Ordinance. He said that the main objective of the Bill was to amend the definitions of "hotel" in the Hotel Proprietors Ordinance (Cap. 158) and the Hotel Accommodation Tax Ordinance (Cap. 348); and the definitions of "hotel" and "guesthouse" in the Hotel and Guesthouse Accommodation Ordinance (Cap. 349) in order to specify the scope of the definitions. Amendments were also made to the Hotel and Guesthouse Accommodation Ordinance (Cap. 349) to extend the period of licences to a maximum period of 36 months and to facilitate enforcement of the licensing scheme.

5. DS for HA said that the existing definitions of "hotel" and "guesthouse" in the three Ordinances did not cover establishments offering accommodation only to limited categories of persons, such as persons of a particular nationality or clients of a tourist agency. Some establishments which were in fact hotels and guesthouses could therefore operate outside the control and regulation of these Ordinances without the need to comply with the fire and building safety conditions, and health and hygiene requirements under Cap. 349. They were also not required to pay tax under Cap. 348. Their existence and operation not only posed a potential threat to public safety, but also brought about substantial revenue implications as well as unfair competition in the industry. The Administration had considered administrative remedies but the High Court Judgement in March 1996 (The Queen Vs Triview Limited) ruled that hotels which accepted guests with prior reservations but not to "any person presenting himself" were not within the purview of the Hotel and Guesthouse Accommodation Ordinance. The judgement had created a loophole as far as enforcement was concerned. Legislative amendment was therefore necessary so that definitions of "hotel" and "guesthouse" would clearly include those establishments which offered accommodation only to limited categories of persons.

6. DS for HA said that another crucial issue in the Bill related to the licensing scheme for hotels and guesthouses. The Bill sought to extend the period of licence issued under section 8 and renewal of licence under section 9 of Cap. 349 to a maximum period of 36 months. The proposal was made in response to hotel owners' request to facilitate their planning of the extensive and costly hotel renovation works which normally took place once every few years. The provision would enable the Licensing Authority of the Home Affairs Department to determine, on a case-by-case basis, the issuance of licence up to three years to obviate the need for annual renewal. The 3-year licence would be given only to those establishments that had demonstrated a good record of compliance with the fire and building safety standards. Guesthouses might also be considered for the issue of three-year licence if they could attain the same standards.

7. DS for HA also briefed members on the following technical amendments to the Hotel and Guesthouse Accommodation Ordinance (Cap. 349) -

  1. Clauses 8 and 9 were to allow notices under sections 19 and 20 of Cap. 349 to be served by posting them in a conspicuous part of the premises without stating the name of the addressee. At present, notices were served to the responsible persons of hotels or guesthouses personally or by registered post to direct remedial works under section 19 and to notify the Administration's intention to apply from the District Court for closure order under section 20. Serving of such notices was difficult when the whereabouts or identity of the responsible persons were not known.

  2. Clauses 9 and 10 were to enable any person authorized by the Secretary for Home Affairs (S for HA) in writing to enter a hotel or guesthouse to execute remedial works under section 20, while a closure order was in force.

  3. Clause 11 was to add a new section to extend the time limit for prosecution of offences under Cap. 349. The proposed period would be either six months from the commission of the offence or six months from the offence being discovered by or brought to the notice of the Licensing Authority, whichever was the later.
8. DS for HA added that the Bill was previously introduced into the former Legislative Council on 29 May 1996. However, the resumption of Second Reading debate of the Bill did not take place due to other legislative priorities which had to be completed before the transfer of sovereignty on 1 July 1997. He stressed that despite the deferment of the Bill, the Administration had been in close liaison with the hotel and guesthouse industries before re-introducing the Bill to the LegCo. No major amendment was made to the previous version and the industries were generally in support of the Bill.

Scope of definitions of "hotel" and "guesthouse"

9. Mr Edward HO enquired whether service apartments were covered by the definition of "hotel" and "guesthouse" in the Hotel and Guesthouse Accommodation Ordinance (Cap. 349). Principal Assistant Secretary for Home Affairs (PAS for HA) replied that premises providing accommodation exclusively for a continuous period of 28 days or more were subject to the Landlord and Tenant (Consolidation) Ordinance (Cap. 7) and were outside the ambit of Cap. 349. For the avoidance of doubt, S for HA could by exclusion orders exclude this type of premises from the applications of the Ordinance. In reply to Mr HO's further enquiry, PAS for HA clarified that service apartments and holiday flats providing rented accommodation services on both daily and monthly basis would still be covered by the proposed definition of "hotel" and "guesthouse" in the Bill.

10. Mr James TO enquired about the rationale for excluding premises providing accommodation for a minimum period of 28 continuous days. He said that some service apartments were rented for a continuous period of two weeks, and that there were occasions where the seller of a flat might enter a temporary tenancy agreement with the buyer to rent the accommodation for a period of less than 28 days to facilitate house-moving arrangements. PAS for HA explained that the spirit was to exclude premises which were rented on a monthly basis, and "28 days" being the minimum number of calendar days in a month was adopted simply to facilitate enforcement.

11. DS for HA further explained that the exclusion order under Cap. 349 was mainly targeted at four categories listed in paragraph 9 of the LegCo Brief. The purpose was to make it clear that the revised definitions would not cover those premises which were already subject to the regulation of other ordinances. Chief Officer of the Licensing Authority said that the definition was intended to cover premises which received bookings and which provided sleeping accommodation for "any person presenting himself". The purpose was to ensure that these premises were safe for accommodation purposes. Private tenancy agreements between two parties concerning accommodation rented on a monthly basis was outside the ambit of the three Ordinances under discussion.

12. Given that hotels and guesthouses were substantially different in terms of their scale of operation and size of investment, Mr Howard YOUNG enquired whether the Administration would consider different legislation or different definitions for "hotels" and "guesthouses" to provide a clear guide to visitors and to facilitate licensing. Mr CHAN Wing-chan expressed similar views and suggested that hotels and guesthouses should be subject to different licensing conditions. DS for HA responded that the Administration had noted the concerns of members and that of the hotel industry. The Home Affairs Bureau would, in consultation with the trade and relevant bureaux, conduct a separate exercise to review the definition of "hotel" and "guesthouse" in due course. In response to Mr YOUNG's suggestion that hotels and guesthouses could be classified by the number of rooms provided, DS for HA said that this would be examined in the future review. PAS for HA said that the proposed definitions in the present Bill did not distinguish "hotels" from "guesthouses" on the basis of their room capacity and range of facilities.Adm

Issue and renewal of licence

13. Mr Edward HO expressed concern that under section 22(1) of the Ordinance, the Chief Executive in Council could from time to time make new and additional regulations on the building and fire safety standards for hotels and guesthouses. The uncertainty about licence renewal conditions would greatly affect the operation of hotels and guesthouses. He said that when Cap. 349 came into operation in 1991, many hotels were issued licences with schedules specifying the modification works required. This had caused much confusion to the industry at that time. Now that most hotels had complied with the schedules of the licence, Mr HO considered that Government would only need to ensure no unauthorized alterations had been made to the approved plan. To reduce uncertainty about licence renewal conditions, Mr HO suggested the Administration to consider extending the maximum period of licence up to five years for those hotels with a good record of compliance. The Chairman added that the Licensing Authority could still conduct surprise inspection during the five-years licence period, and that the fee for a five-years licence could be five times of an annual licence.

14. Mr James TO asked about the rationale for setting the maximum period of a licence at three years instead of five or seven years. DS for HA said that Government was taking progressive steps to streamline the licensing scheme and the proposed extension of the licence period from one year to three years was already a great improvement having regard to public safety and convenience to the trade. With regard to worries of the trade about frequent amendments to fire safety requirements, DS for HA assured members that, save exceptional circumstances, the Administration would not impose additional requirements on renewal of licence. He said that since the implementation of the Ordinance, there was only one appeal case concerning renewal of licence. The court had ruled in this case that the same safety standards as specified in the schedule of the licence must be complied with before the application for licence renewal could be approved. PAS for HA added that the Administration had issued policy guidelines specifying that new conditions would not be imposed on a licence when the works required under the schedule had been completed, unless there were alterations affecting the safety of the premises, or apparent safety threats. The Federations of Hong Kong Hotel Owners Limited was also aware of the Government policy in this respect. DS for HA supplemented that should there be new research findings about the safety of certain building materials used in old buildings, revisions might have to be made to building safety standards.

15. Noting that the Fire Services Department reviewed and updated its Code of Practice every 10 years, Mr Edward HO sought assurance from the Administration that changes to the Code or the relevant regulations would not affect hotels and guesthouses for renewal of licence. DS for HA further explained the policy guidelines and emphasized that no additional requirements would be imposed upon licence renewal, unless for reasons of public safety as described in paragraph 14. Mr Edward HO suggested that sufficient time should be allowed for hotels to complete the necessary modification works when introducing new requirements.

16. Considering that hotels and guesthouses were basically different modes of operations, Mr HO Sai-chu suggested a multi-tier licensing system for hotels and guesthouses. His suggestion was supported by Mr James TO and Mr CHAN Wing-chan. They considered that hotels with good records of compliance should be given licences of a longer period, say, five or seven years. DS for HA responded that generally speaking, smaller establishments would be subject to tighter control under the proposed licensing system, and only those with good record of compliance would be considered for a licence up to a maximum period of 36 months.

Licence fees

17. Arising from Mr Howard YOUNG's enquiry about the frequency of inspection on licensed hotels and guesthouses, the Chairman asked whether the licence fees were based on the policy of cost-recovery. DS for HA responded that the current licence fees could only recover 26% of the costs. However, in view of the recent economic downturn, the Administration had no intention to increase licence fees in the current financial year.

Enforcement against unlicensed guesthouses

18. Mr CHAN Wing-chan enquired about the control of unlicensed guesthouses especially those operating in residential buildings. He asked about the regulatory criteria and whether these would add burden to the guesthouse industry if major alteration or renovation was required. DS for HA acknowledged the problem of unlicensed guesthouses and said that control of these premises was primarily to ensure that they were safe for accommodation. He said that guesthouses were required to comply with basic fire safety and building requirements and these would not lead to extensive renovation of the premises. The Licensing Authority would investigate complaints of unlicensed guesthouses and would further discuss with the Police to step up enforcement action.

Re-entry to premises under a closure order

19. Mr James TO agreed that the Ordinance should provide for persons authorized by S for HA in writing to enter a hotel or guesthouse to execute remedial works whilst a closure order was in force. He asked whether there were similar provisions in other ordinances such as the Buildings Ordinance. Chief Officer of the Licensing Authority confirmed that similar provisions existed in other ordinances such as the Buildings Ordinance. At Mr TO's request, DS for HA agreed to provide examples of similar provisions in other legislation.

(Post-meeting note : The Administration has provided extracts of section 27 of the Buildings Ordinance and section 11 of the Places of Public Entertainment Ordinance for members' information before the meeting on 22 October 1998.)

Time limit for prosecution

20. Mr James TO expressed concern whether the proposed relaxation on time limit for prosecution was consistent with other legislation. He said that according to section 26 of the Magistrate Ordinance, prosecution could not be instituted against an offence which had been committed more than six months before the date the summon was issued by the relevant Authority. He asked whether the proposed extension of time limit for prosecution in the Bill (i.e. six months after discovery of the offence) was in line with other legislation. Senior Government Counsel confirmed that the drafting of the proposed provision was in order. At Mr TO's request, the Administration agreed to provide examples of similar provisions in other legislation.

(Post-meeting note : The Administration has provided extracts of the Gas Safety Ordinance (section 33), Buildings Ordinance (section 40) and Bedspace Apartments Ordinance (section 34) before the meeting on 22 October 1998.)

21. The Chairman thanked representatives of the Administration for attending the meeting. He requested the Administration to consider members' suggestions of further extending the licence period up to seven years.Adm

Date of next meeting

22. Members agreed to meet at 10:45 am on Thursday, 22 October 1998. Members also agreed to invite deputations from the hotel and guesthouse industries to present their views on the Bill at the next meeting.

23. The meeting ended at 12:30 pm.

Legislative Council Secretariat
15 July 1999