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.