How Hawaii’s Increased Hotel Tax Will Support Climate Resilience in the Islands

HONOLULU (AP) — Hawaii has made a significant move to tackle environmental challenges. On Friday, lawmakers approved a new tax aimed at generating funds for eco-friendly projects and climate change defenses. Governor Josh Green is set to sign this groundbreaking legislation.

The law introduces a 0.75% increase to the existing tax on hotel rooms and other short-term rentals. Additionally, an 11% tax will apply to cruise ship bills, adjusted according to how long ships dock in Hawaii. Officials estimate this tax hike could bring in nearly $100 million each year.

These funds will support essential projects. This includes replenishing eroding beaches like Waikiki, promoting hurricane safety measures such as roof clips, and clearing invasive grasses that fueled wildfires in Lahaina last year.

This bill received strong support, passing with wide margins in both the House and Senate, which are largely controlled by Democrats. Experts mark this as a first in the U.S.—a state lodging tax tied directly to environmental efforts.

Currently, Hawaii imposes a 10.25% lodging tax, which will rise to 11% starting January 1. When combined with local taxes, visitors may face a total tax of 18.712%, one of the highest rates in the country. Governor Green believes the increase is manageable, arguing that visitors value Hawaii’s natural beauty and will welcome contributing to its preservation.

“Investing in our environment ensures that we maintain a loyal visitor base,” Green said. However, discussions around the tax’s potential impact on tourism continue. Zane Edleman, a tourist from Chicago, expressed concern that higher costs might deter travelers. Yet, he believes that clear communication about how funds are used can help build trust.

Experts agree that transparency is vital. If the state demonstrates how it utilizes the money for environmental efforts, it could encourage visitors to support the increased tax. Meanwhile, Rep. Linda Ichiyama emphasized the need to balance protecting the environment with sustaining the tourism industry.

Several voices from the tourism sector share similar sentiments. John Pele from the Maui Hotel and Lodging Association remarked on the importance of ensuring that Hawaii remains an attractive destination for tourists. “Will we be pricing ourselves out of the market?” he wondered.

The discussions around this legislation highlight it as a step towards sustainable tourism. As Hawaii grapples with the challenges of climate change, this initiative reflects a growing recognition of the need for innovative funding solutions. Recent studies indicate that sustainable tourism practices can substantially boost local economies while preserving natural resources.

As the 0.75% increase and cruise ship tax moves forward, all eyes will be on Hawaii to see if this model can inspire other states to take similar actions for environmental sustainability.

For more insights on climate change and its impacts, visit EPA’s Climate Change site.

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