The government has moved to sharply increase penalties for hotels and restaurants in Islamabad, with some fines rising by as much as 50 times under newly approved legislation.
The National Assembly passed the Pakistan Hotels and Restaurants (Amendment) Bill, 2026. The Senate had already passed the bill on June 10, 2026. The legislation amends the Pakistan Hotels and Restaurants Act, 1976 to the extent of the Islamabad Capital Territory (ICT).
One of the biggest changes concerns hotels and restaurants that fail to apply for registration within the required period. The maximum penalty for this violation has been increased from Rs. 5,000 to Rs. 250,000, representing a 50-fold increase.
The daily penalty for continuing the same violation has also been increased from Rs. 1,000 to Rs. 10,000.
Old and New Fines
| Violation | Old Fine | New Fine |
|---|---|---|
| Failure to apply for registration | Up to Rs. 5,000 | Up to Rs. 250,000 |
| Continuing failure to register | Up to Rs. 1,000 per day | Up to Rs. 10,000 per day |
| Serving harmful or contaminated food or using contaminated utensils | Up to Rs. 1,000 | Up to Rs. 10,000 |
| Failure to follow an order or direction issued under the law | Up to Rs. 1,000 | Up to Rs. 10,000 |
| Charging above approved fair rates, first offence | Up to Rs. 1,000 | Up to Rs. 10,000 |
| Charging above approved fair rates, subsequent offence | Up to Rs. 2,000 | Up to Rs. 20,000 |
| Unregistered restaurant failing to comply with a directive | Up to Rs. 5,000 | Up to Rs. 125,000 |
| Unlicensed hotel or restaurant improperly advertising itself or using a star sign | Up to Rs. 1,000 | Up to Rs. 10,000 |
| Continuing improper advertising or use of star classification | Up to Rs. 200 per day | Up to Rs. 2,000 per day |
The amendment also allows these penalties to be increased in the future while taking into account the Consumer Price Index (CPI) or inflation, subject to prescribed rules.
Smaller Hotels Will Also Come Under Regulation
The bill makes another major change by expanding the legal definition of a hotel.
Under the existing law, an establishment needs at least 10 lettable bedrooms to fall within the definition of a hotel. The amendment reduces this threshold to just five rooms. This could bring smaller hotels and accommodation businesses in Islamabad under the registration and regulatory framework.
The legislation also adds environmental hazards and earthquakes to the factors considered under hotel registration requirements.
Authorities will also receive explicit power to seal premises through departmental staff, with assistance from the local administration and police as part of the enforcement measures available under the law.
According to the bill’s statement of objects and reasons, the amendments are intended to update regulatory authority and revise penalties under the decades-old law. The Senate Standing Committee had earlier said the higher penalties were aimed at improving deterrence and ensuring stricter compliance in the tourism and hospitality sector.
The changes apply specifically to the Islamabad Capital Territory and should not be interpreted as a nationwide increase in hotel and restaurant penalties.
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