Hawaii

Hawaii Lodging Taxes Could Hit 20% As New Fees Loom

Published

10 months ago

March 17, 2025

Hawaii Lodging Taxes Could Hit 20% As New Fees Loom

Travelers to Hawaii may soon face higher lodging costs if Governor Josh Green’s latest legislative push succeeds. Proposed increases to the transient accommodations tax (TAT), alongside a new statewide green fee, aim to raise $500 million annually for climate change and wildfire mitigation—largely a cost to be borne by visitors.

The plan is said to be part of a broader response tied to the devastating August 2023 fires that destroyed Lahaina and claimed 102 lives. While versions of this idea have surfaced in past sessions even as the bills died in the legislature, this year’s push has gained some fresh urgency and traction.

What is the Hawaii accommodation tax, and what’s changing?

Hawaii’s current statewide TAT sits at 10.25%, with each county adding its own 3% surcharge. That brings the total accommodation tax to 13.25% before adding the 4.712% general excise tax. Altogether, lodging taxes have already approached 18%.

Senate Bill 1396 would increase the state TAT from 10.25% to 12% in 2026. With existing add-ons, total taxes on hotel rates could climb to nearly 20%.

Governor Green initially proposed a 1.7% increase but scaled it back to 1% after industry opposition. He called the new proposal a compromise.

“People will still come,” Green was quoted in a recent interview. “People are still coming in giant droves. I’m meeting the hotel industry halfway.”

How Hawaii compares to other destinations.

Hawaii already ranks among the highest in the U.S. for lodging taxes. Las Vegas, for example, imposes hotel taxes between 13% and 14%, while New York City adds just over 14%. Some international destinations, like Paris or Rome, charge the equivalent of only a few dollars per night as a flat fee.

These comparisons help, in part, explain growing traveler frustration. For many, Hawaii’s cost—especially for lodging—is starting to resemble European rates, often without the perceived value. Cynthia, a reader, commented on a recent Beat of Hawaii article, “We’ve started looking at Portugal instead. Flights are longer, but once we’re there, we spend less. And we aren’t nickeled and dimed like we are in Hawaii.”

Industry pushback grows louder.

The visitor industry remains skeptical of continued tax hikes, particularly when tourism remains in recovery mode. Critics argue that taxing visitors while simultaneously investing in tourism promotion sends mixed signals.

Some industry voices are now warning that visitors are growing wary—not just of pricing but also of the lack of clarity surrounding where the money goes. One hotel executive recently noted that without transparency and coordination, even well-intentioned measures could backfire. The concern isn’t just financial—it’s reputational.

Tom Yamachika of the Tax Foundation of Hawaii wrote: “We wonder if lawmakers aren’t thinking that the transient accommodations tax is like duct tape, in that it fixes everything.”

Several bills this session propose tapping into the same revenue stream. In addition to SB1396 and its near-identical counterpart HB1077, there is also still-active HB504, which suggests an unspecified TAT hike and an added $20-per-night charge for rooms booked through loyalty programs, such as when visitors use points or miles.

Industry groups warn that these combined efforts could overreach, creating a tax burden that deters repeat visitors and increases the appeal of competing destinations.

What is the green fee?

Governor Green’s original vision included a broad-based tourism climate fee, which is where the so-called green fee name came from. Variants of the idea include annual visitor climate licenses, per-entry charges to popular Hawaii state parks or beaches, or bundled fees tied to accommodations or even airfare.

So far, no single version has advanced. However, it remains a legislative possibility and could emerge as a companion measure to the TAT increase.

Other destinations have implemented similar programs, including Bhutan’s Sustainable Development Fee, which is $100 per night. Different models may influence Hawaii lawmakers as they refine details, and Beat of Hawaii is currently visiting and exploring destinations envisioning similar fees.

Hawaii residents pay, too.

Because interstate commerce laws prevent states from taxing out-of-state visitors differently, kamaaina (residents) will also feel the impact of the higher TAT. Governor Green has suggested a potential tax credit to offset the cost for residents, but no concrete plan has been finalized.

For now, residents booking staycations, visiting family or doctors, or attending events that require overnight stays would face the same tax hike.

How this could impact travelers.

These changes add to an already complex cost structure for visitors. That includes resort fees, parking charges, taxes, environmental fees, and rising nightly rates, which all combine to create sticker shock—especially for first-timers.

Fee fatigue is real. Between resort charges, cleaning fees, parking, and taxes—often layered and poorly explained—many travelers report a sense of distrust that wasn’t present in past years. That sentiment is beginning to show up in reduced stay lengths and shifting loyalty patterns.

These costs are leading some to modify Hawaii plans. Travel agencies report shorter stays, off-peak travel, and increased demand for budget options.

Will the legislation pass?

SB1396 is still alive but far from guaranteed to succeed. Similar bills failed to move forward in the past two legislative sessions. However, the Lahaina fire has shifted the political climate and placed renewed pressure on lawmakers to act.

Some argue that Hawaii’s dependence on tourism necessitates bold investment in climate resilience. Others worry that piling new taxes on visitors without transparency on how funds will be used risks undermining confidence and return travel.

The bill outlines two special funds—one for climate initiatives and one for economic revitalization—but offers few details about oversight or performance metrics.

The bigger question for Hawaii tourism.

As Hawaii grapples with balancing sustainability and affordability, travelers and residents alike will feel the impact of these proposed changes. Whether visitors are willing to pay more for vacations in paradise—and whether lawmakers can ensure the funds are used effectively—will shape the future success of Hawaii tourism.

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Hawaii

Hawaii Pacific basketball teams split with Menlo | Honolulu Star-Advertiser

Published

4 hours ago

January 9, 2026

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Hawaii

Hawaii County accepting applications for Summer Fun employees

Published

16 hours ago

January 8, 2026

Press Room

Hawaii County accepting applications for Summer Fun employees

HAWAII ISLAND (HawaiiNewsNow) – The County of Hawaii Department of Parks and Recreation is now accepting applications for temporary positions in its 2026 Summer Fun program.

The two positions available are Activity Aide I ($17.50 per hour) and Activity Aide II ($19 per hour).

To be considered for employment, applicants must possess a valid first-aid certification, attend mandatory training June 2–5, and be available to work June 8–July 17.

Applications are available online on the Parks and Recreation website, and must be submitted to the Recreation Division Office at 799 Pi‘ilani St., Hilo, HI 96720, postmarked by Saturday, Feb. 28.

For more information, call the Recreation Division Office at (808) 961-8740.

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Hawaii

Hawaii’s jobless rate remains second lowest in U.S. – Hawaii Tribune-Herald

Published

1 day ago

January 8, 2026

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Hawaii’s jobless rate remains second lowest in U.S. – Hawaii Tribune-Herald

Hawaii’s labor market
continues to rank among the best
in the country.

The state’s seasonally adjusted rate plunged three-tenths of a point to 2.2% in November from September and now has fallen by a half-percentage point over the last three reporting periods, according to data released Tuesday from the state Department of Business, Economic Development and Tourism.

There was no unemployment data for October due to the federal government shutdown.

The 2.2% rate maintained Hawaii’s ranking as the second lowest in the country, according to state data released Wednesday — a day later — by the U.S. Bureau of Labor Statistics.

Only South Dakota was lower in November at 2.1%.

The last time Hawaii’s rate dropped below 2.2% was in March 2020 when it hit 2.1% just before the pandemic started.

Hawaii’s low number caught Eugene Tian, DBEDT’s former state chief economist, by surprise.

“I was surprised to see the unemployment rate dropped to 2.2% in November,” said Tian, who retired at the end of May. “It is close to the historical low of 2.0% Hawaii experienced during the last four months of 2017. Hawaii ranks as one of the best labor markets in the nation.”

Hawaii’s rate has dropped from 2.7% in August to 2.5% in September to 2.2% in November.

Nationally, the U.S. unemployment rate was 4.6% in November, up by two-tenths of a point from September.

Tian said Hawaii’s unemployment rate fell sharply mainly due to a large increase in the number of people employed. Between September and November, the state’s labor force jumped by 1,000, or 0.15%, but the number of people employed increased by 2,800, or 0.42%.

“The faster increase in employment, with a slower increase in the labor force, made the unemployment rate low,” Tian said. “The increase in employment was due to the increase in payroll jobs (1,700 between September and November) and self-employment at 1,100.”

The state’s labor force, which is compiled from a telephone survey of households, edged up in November to 688,000 from 687,000 in September. The labor force includes those who are employed, those who are unemployed but actively seeking work and those who are self-employed. The number of people employed rose to 672,650 from 669,850 while those unemployed fell to 15,350 from 17,200.

In a separate survey, an increase in nonfarm payroll jobs in November from September was mainly driven by a 1,000 increase in construction jobs and a 1,000 gain in professional and business services.

Nonfarm payroll jobs are calculated from a mail survey of employers and are considered a better indicator of job growth due to a larger sample size than the labor force data, which is compiled from a telephone survey of households. In the payroll count, one person might be counted multiple times if that person has multiple jobs.

Tian said construction jobs continued their ascent in 2025 with the November number at a historical high of 42,000, while the values of completed construction, as measured by the contracting tax base, decreased every month between May and September 2025 (the latest data available is September), and the value of private building permits issued decreased every month between August and November 2025 (latest data available is November).

Tian said Hawaii’s unemployment numbers could rise in March when the Bureau of Labor Statistics benchmarks data of the previous year based on complete survey data. He noted that monthly data is based on sample data.

“Due to sampling errors for the monthly data, it is possible that the labor statistics may overstate the current conditions and the corrections will be released in March this year,” he said. “The lagging effect of new hires and activities may also contribute to the distortion of the labor statistics. I expect the unemployment rates will be adjusted toward higher levels when the numbers are benchmarked in March.”

Tian said if more people join the labor force, the state’s unemployment rate will rise when the number of employed people stabilizes.

“In the last few months, the labor force participation rate was stable at 60.4% (August-November),” he said. “Hawaii’s current labor force participation rate is lower than the U.S. at 62.5% (November 2025) and lower than the Hawaii monthly average of 61.1% in 2019. If labor force participation goes higher, the unemployment rate is likely to rise.”

While the state’s seasonally adjusted unemployment rate fell, all of the state’s four major counties saw increases. State and national labor force data are adjusted for seasonal factors, but the county jobs data are not seasonally adjusted and thus do not take into account variations such as the winter holiday and summer vacation seasons.

Honolulu County’s rate rose to 2.3% from 2.2%. Hawaii County’s rate increased to 2.7% from 2.5%. Kauai County’s rate rose to 2.3% from 2.2%. And Maui County’s rate increased to 2.6% from 2.5%. Within Maui County, Maui island’s rate rose to 2.6% from 2.3%, Molokai’s rate fell to 4.0% from 5.9% and Lanai’s rate dropped to 1.1% from 2.2%.

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