Governor Josh Green has signed legislation boosting the tax on hotel rooms and vacation rentals as Hawaii seeks to raise money to help address the potential ramifications of climate change.
Newsweek has contacted Green’s office and the Hawaii Tourism Association for comment via email.
Why It Matters
Known for its beautiful beaches and tropical climate, Hawaii has long been a popular tourist destination, and increasing numbers of Americans have visited the state since 2014. In 2022, 7 million American tourists went to Hawaii, according to Statista.
In August 2023, wildfires ignited across the island of Maui, with flames being spurred on by strong winds. The fires left 102 people dead and caused considerable damage to the city of Lahaina, with up to 80 percent of it destroyed. Green mentioned the state’s need for additional firebreaks at Tuesday’s bill signing.
What To Know
The new legislation is set to add 0.75 percent to the daily room tax rate.
Green previously told Newsweek, “The implementation of this Green Fee ensures that visitors who come to Hawai’i are making an investment in Hawai’i’s future and become our partners in regenerative tourism.”
He said the tax would amount to about $4 on a hotel room costing $500 a night and would help “pay for all the climate impact of receiving 10 million visitors a year.”
The legislation also adds a new tax of 11 percent on cruise ship bills beginning in July 2026. This is set to be prorated for the number of days the ships are in Hawaii’s ports.
Officials estimate that the tax will generate almost $100 million each year.
Speaking at the bill signing ceremony, Green said Hawaii needed to build more firebreaks and pay a fire marshal. He added that other states and nations should act similarly to address issues brought on by climate change.
“There will be no way to deal with these crises without some forward-thinking mechanism,” he said.
The tax increases come at a critical moment for the country’s tourism industry, as advisories issued for those traveling to the U.S. could be set to take a serious toll on the sector. Widespread calls to boycott the U.S. by canceling holidays have also emerged on social media.
The tourism sector contributed $2.36 trillion to the U.S.’s gross domestic product in 2023, according to the World Travel & Tourism Council, and accounted for about 11 percent of the total U.S. job market.
What People Are Saying
Hawaii Governor Josh Green previously told Newsweek: “We need these dollars to help replenish our beaches, build firebreaks and more. The mitigation efforts it will fund will have a stabilizing effect on the insurance market after the Maui wildfires, and it will generate $100 million for us every year.”
What Happens Next
The room tax is set to come into effect on January 1, 2026.
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