Why Airbnb Struggles in Hong Kong

In many cities around the world, short-term rental platforms like Airbnb have become a new accommodation option for travelers. However, in Hong Kong, such short-term rental services struggle to operate legally. Why exactly is there no Airbnb in Hong Kong? Behind this issue lie multiple factors, including legal, regulatory, housing market, and social impact considerations. Below, we break it down in detail for you.

1. Legal Regulation: Hotel and Guesthouse Accommodation Ordinance Restricts Short-term Rentals

Hong Kong's Hotel and Guesthouse Accommodation Ordinance stipulates that any unit providing accommodation for less than 28 days must obtain a "hotel license". However, the Airbnb model primarily involves short-term rentals, and many property owners do not hold the required license, constituting "unlicensed operation of a guesthouse", which violates the law.

In recent years, the government has proposed amendments to the Hotel and Guesthouse Accommodation Ordinance to strengthen enforcement and penalties, including:

• Increased Penalties: Fines for unlicensed operation have been raised from HKD 200,000 to HKD 500,000, and the imprisonment term has increased from two to three years.
• Enhanced Enforcement Powers: Enforcement officers can apply to the court for search warrants and even use reasonable force to enter premises for investigation.

These regulations make it difficult for the short-term rental market to develop in Hong Kong and prevent platforms like Airbnb from thriving as they do in other cities.

2. Tight housing supply, short-term rentals affecting livelihoods

Hong Kong has limited land resources and a tight housing supply, with property prices and rents remaining at high levels. If the short-term rental market were to open up, the following impacts could occur:

• Rent increases: Landlords may prefer to rent out units to tourists on a short-term basis rather than to local residents on long-term leases, further driving up rents.
• Impact on community environment: The high turnover of short-term rental guests, with frequent comings and goings, may cause disturbances for building residents, such as noise issues and security concerns.

In contrast, governments in places like Singapore establish designated short-term rental apartment zones to avoid affecting the housing needs of long-term residents, while Hong Kong has opted for stricter regulatory measures.

3. Considerations of the Hotel Industry and Government Interests

Hong Kong's hotel industry makes significant contributions to the economy, and the short-term rental market could potentially impact the revenue of traditional hotels. Therefore, the government maintains strict restrictions on Airbnb, indirectly safeguarding the competitive advantage of the local hotel industry. Additionally, the hotel industry is subject to stringent regulations to ensure fire safety, hygiene standards, and more, whereas short-term rental apartments are difficult to monitor comprehensively. As a result, the government tends to favor protecting the existing hotel model.

4. The Government Has Not Established a Legalization Plan for Short-term Rentals

Cities like Tokyo and Paris have already implemented specific regulations for short-term rentals, such as requiring Airbnb hosts to register and limiting the number of days for short-term rentals, allowing the sector to develop in an orderly manner under the law. However, Hong Kong has yet to introduce similar measures, making it almost impossible for the Airbnb model to survive.

Will There Be Airbnb in Hong Kong in the Future?

With the government tightening regulations, the development space for Hong Kong's short-term rental market is limited, and the likelihood of Airbnb becoming legalized in the future is low. However, if the government is willing to introduce a specific short-term rental apartment scheme or establish a "short-term rental license," the market might find a new balance. Under the current policies, though, Airbnb remains difficult to popularize in Hong Kong.

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