Hong Kong will reduce the COVID-19 hotel quarantine period for all guests from seven to three days, taking another step to progressively relax the strict pandemic regulations that have isolated the Asian financial destination.

Arrivals will be required to self-monitor for an additional four days, during which they will be prohibited from entering food establishments and night clubs.

The regulations will go into force on Friday, John Lee, the mayor of the city said at a news conference on Monday.

Lee stated, "We must strike a balance between people's livelihood and Hong Kong's competitiveness to provide the community maximum energy and economic vigor."

Quarantined individuals will receive a red code on a government-mandated app. Once they leave quarantine, this will change to a yellow code, indicating they cannot enter busy areas.

Historically, quarantine might last up to three weeks. Currently, all immigrants are required to spend a minimum of one week in hotel quarantine, submit to periodic testing orders, provide feces samples for infants, and fill out numerous documents.

There are only a limited number of hotels available for quarantine.

Rooms are expensive and sometimes booked months in advance. Refunds are not granted until the government's policy changes or the flight is canceled.

The pandemic restrictions have harmed Hong Kong's competitiveness, say business executives, who hope that Lee, the city's leader since 1 July, will repeal the quarantine regulations.

Since 2020, the city's border has been almost entirely sealed, and overseas arrivals are subject to rigorous quarantine and testing measures. It is one of the remaining places in the world that still requires arrivals to undergo quarantine.

The city's leader has vowed to re-establish Hong Kong's connections with the mainland and the rest of the world. In July, he lifted a restriction that prohibited individual planes from bringing in travelers infected with the coronavirus, stating that it caused needless problems and discomfort for locals.

This year, more than 100 flights were canceled, a big inconvenience for businesses and citizens used to quick and easy movement from the city.

After the announcement, shares of Cathay Pacific Airways surged as much as 3.5% to HK$8.77, the largest daily percentage increase since June 28.

In the past two years, Hong Kong's tight pandemic regulations have caused a 98 percent decline in the airline's passenger counts.

The well-known international Rugby Sevens tournament will return to Hong Kong on November 4-6 after more than three years. It was canceled for 2020 and 2021 due to pandemic precautions.