Hawaii Boosts Hotel Tax to Combat Climate Change: What Travelers Need to Know

Hawaii is taking a bold step to tackle climate change with new legislation aimed at boosting hotel stays and funding environmental initiatives. Starting January 1, 2026, a 0.75% levy will be added to existing taxes on tourist accommodations, including hotels and vacation rentals. Additionally, an 11% tax on nightly cruise ship stays will be implemented.

This legislation, known as SB1396, is projected to generate nearly $100 million annually. The funds will support vital projects to protect the environment and prepare for natural disasters, which are becoming more frequent due to climate change. Hawaii, which welcomes about 10 million visitors each year, hopes to channel these resources into initiatives like safeguarding coral reefs and removing invasive plant species that can worsen wildfires.

The increase brings Hawaii’s total tax on short-term rentals to a striking 18.712%. This includes the current 10.25% tax and an additional 3% county tax, plus a 4.712% general excise tax applicable on various goods and services.

Governor Josh Green has expressed strong support for this initiative, calling it a “generational commitment” to protect Hawaii’s ‘āina, or land, which reflects the deep bond between the people and their environment. This is a pioneering move, making Hawaii the first state to impose a lodging tax specifically for climate change. He believes that visitors will recognize the importance of supporting environmental protections.

Local advocacy group Care for ‘Āina Now has highlighted a staggering $560 million shortfall in funding for environmental efforts across the islands, reinforcing the need for such measures. While a larger tax increase was initially considered, lawmakers opted for a balanced approach after feedback from the tourism industry.

Recent discussions in the tourism sector reveal a mix of support and concern. Many believe that tourists are becoming more eco-conscious and might appreciate contributing to sustainability efforts, while others worry about the impact on travel bookings. Engaging travelers in conservation efforts could create a new standard for how tourism integrates with environmental responsibility.

As Hawaii moves forward with this legislation, it’s clear that the state’s unique environment and cultural heritage are shaping a forward-thinking approach to tourism and climate action. The governor’s decision will be finalized by July 9, and many are watching closely to see how this initiative unfolds.

For further insights into Hawaii’s tourism and environmental strategies, you can check out reports from the Hawaii Tourism Authority.

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