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Hawai’i Proposes New Tourist Fees: What Does This Mean for Travelers?

by Aoife O’Riordan

Jan 24, 2024

© Martinmark | Dreamstime.com

eFlyer Lead

The governor of Hawai’i announced a proposal for a series of reforms on tourist fees for both tourists and vacation rentals across the state during his State of the State address on Jan. 22. During his speech, in which he covered last year’s devastating Maui fires, Green spoke of his concerns around short-term vacation rentals, with two current proposals in the works to raise funds to support climate change and fire control efforts.

The first proposal seeks to raise the accommodations tax rate. The other fee, costing $25 per traveler, would, he argued, confront the reliance on fossil fuel and be tacked on to the cost of guest accommodation. Additionally, Green pledged to begin a possible temporary suspension of short-term vacation rentals in West Maui as early as March 1. This suspension will go into place if, according to Green, the owners do not volunteer their properties to families displaced during last year’s fires.

“I want to make a personal appeal — right now — to every owner of a short-term rental property on Maui,” said Green. “Please join us today in our mission to house the Lahaina families who have been displaced by the disaster — they are part of our ohana, and right now we need your help to care for them. There are 27,000 short-term rental units on Maui alone, and — if we can dedicate just 10 percent of these homes to displaced Lahaina families — we can house them all. If not enough partners step forward to join us as we approach March 1st, I will be forced to declare a moratorium on all short-term rentals in West Maui, until we find enough housing for the displaced families.”

Currently, 52 percent of all short-term rentals in Hawai’i are owned by non-state residents, while 27 percent of short-term rental owners own 20 or more units. The number of these rentals across the state created a housing crisis not only affecting low-income families but also middle-class residents.

The proposed tourist tax addresses climate change and fire control, while the suspension of short-term rentals beginning in West Maui aims to help residents afford and find housing. Green’s plan involves raising accommodation taxes and implementing a fee to out-of-state visitors. Aptly named the Green Fee, the tax would apply to travelers checking into a hotel or vacation rental.

“This modest fee — far less than the resort fees or other taxes visitors have paid for years — will generate more than $68 million every year from visitors,” Green added. “We would invest these funds in beach preservation, fire breaks, and other prevention measures to help us avoid tragedies like the one last year in Maui. I believe this is not too much to ask of visitors to our islands.”

Hawai’i currently has the highest taxes on hotels and vacation rentals in the country. Charged in three different parts, these taxes total about 18 percent.

If the Green Fee passes into law, the Department of Land and Natural Resources will oversee the visitor impact fee program, with plans to begin July 1, 2025. When visitors pay the required fee, they are provided with a license valid for one year.

What are your thoughts on the new proposal? Do you think more places should implement tourist fees? Have you stayed in a short-term vacation rental in Hawai’i recently? Tell us your thoughts. Email us at [email protected]. Please include your full name and location.

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