Hawaii becomes first US state to charge 'Green Fee' on tourists
Hawaii becomes first US state to charge 'Green Fee' on tourists
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Hawaii's Kilauea volcano spews stunning lava fountains
Hawaii's Kilauea volcano spewed lava fountains exceeding 1,000 feet, according to the U.S. Geological Survey.
Hawaii became the first U.S. state to establish a climate impact fee on Tuesday, placing an additional tax on tourists to fund climate change resiliency projects and environmental stewardship within the islands.
As the country's inaugural "Green Fee," Act 96 will raise the state's current transient accommodations tax (TAT) by 0.75% for a total of 11% placed upon the nightly lodging rate, effective Jan. 1, 2026, according to a press release by Governor Josh Green's office.
The fee will apply to travelers staying in hotels, short-term vacation rentals and for the first time ever, cruise ships. For a nightly hotel rate of $300, that would be an extra $2.25 each night.
"As an island chain, Hawaii cannot wait for the next disaster to hit before taking action," Green said in a statement. "We must build resiliency now, and the Green Fee will provide the necessary financing to ensure resources are available for our future."
What is a tourist tax? Many destinations are raising tourist taxes, but are they accomplishing their goal?
The new fee is expected to generate $100 million annually. The funded projects are to be confirmed next legislative session but will span environmental stewardship, climate and hazard resiliency, and sustainable tourism.
Previously, cruise ship passengers had bypassed the TAT, but the new law seeks to promote "equity across the tourism industry" by ensuring all travelers contribute to protecting the islands' economic and natural resources.
The bill came as a response to the growing frequency of natural disasters exacerbated by climate change, specifically the 2023 Maui wildfires, the deadliest wildfire in the country in over a century that decimated the community of Lahaina. In just hours, over 100 people were killed with homes, businesses and cultural sites burnt to ashes.
After the fires, the governor formed the Climate Advisory Team (CAT) to develop climate disaster policy recommendations. A key measure from the group was to secure a source of funding for climate change mitigation and disaster relief, according to the release.
"The Green Fee bill marks a historic investment in climate disaster resilience and environmental protection," said Chris Benjamin, the leader of CAT, in a statement. "Using the TAT to fund resiliency projects ensures that the financial burden of safeguarding our aina (island) and people doesn't fall upon residents alone. We thank the legislature, industry and countless community groups and individuals who advocated tirelessly for this bill."
Tourist taxes are quickly emerging worldwide as more destinations face the impacts of overtourism and climate change. Last year, Greece, Bali and the Galápagos Islands all implemented or raised their fees on travelers to contribute to various programs based on sustainability.
Experts say the effectiveness of such a tax is still up in the air and heavily depends on the outcome and goals. In some cases, like in Venice, a small tax hasn't deterred tourists, but in other places, it has successfully funded beneficial projects.
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An upcoming increase in the state hotel room tax of less than 1 %—or $3 more per night for a $400 room—won't deter any of nearly two dozen Waikiki tourists from coming back, especially if it provides money to restore beaches, fight erosion and prevent future wildfires, they unanimously told the Honolulu Star-Advertiser on Wednesday. 'It wouldn't discourage me, ' Sam Powell, 33, of Roanoke, Va., said on Kalakaua Avenue in the middle of his first trip to Oahu with his wife, sister, brother-in-law and nephews. 'It's just another $3 a night.' Visitors up and down Kalakaua and Kapahulu avenues unanimously supported the increase in the state's Transient Accommodations Tax that begins Jan. 1 and was signed into law by Gov. Josh Green on Tuesday as Act 96. The increase applies to everyone who stays in a Hawaii hotel, cruise ship or other paid lodging—including local residents. Green previously told the Star-Advertiser that residents who receive kamaaina discounts would pay less out of pocket compared to tourists who typically book more expensive room rates. Under Act 96, Hawaii's TAT—more commonly referred to as the hotel room tax—will increase Jan. 1 by 0.75 %—to 11 % up from 10.25 %. Before signing Senate Bill 1396 into law Tuesday, Green used a hypothetical $400 a night hotel room rate to say that the higher TAT would add $3 on the current TAT, or $30 for every $4, 000 spent on lodging across the islands. The Star-Advertiser on Wednesday incorrectly reported a higher TAT on a $400 a night room. Green called it the first effort of its kind in the nation to mitigate climate change and the risk of future wildfires that could serve as a road map for other parts of the country that face wildfires and climate change. Boyfriend and girlfriend Adam Vasquez, 23, and Kaylee Bertolino, 22, came from Long Island, N.Y., for their first trip to Waikiki. Bertolino said the upcoming TAT increase will go 'to a good cause ' and would not deter them from a future trip to Hawaii. Vasquez called Green's example of a $3 per night increase on a $400 per night hotel room 'not too bad.' Most of the visitors who spoke to the Star-Advertiser had no idea how much they were paying in hotel costs, so they could not calculate how the upcoming TAT increase would have affected their current bills. But the TAT represents just one of the many fees that visitors and residents already pay for lodging, including the state's general excise tax, parking and 'resort ' fees that include internet and fitness center access. Green's $400 a night example runs on the high side of nightly hotel rates on Oahu, which are generally less expensive than neighbor island hotels, said Jerry Gibson, president of the Hawai 'i Hotel Alliance. Waikiki room rates are currently running from $250 to $450 a night, Gibson said. 'Normally, in summer, they go up, ' he said. 'But so far its a weak-looking summer, so I think those will be the rates.' Every booking also includes a state general excise tax that's slightly higher on Oahu compared to the neighbor islands. Neighbor islands' lodgings have to assess a GET of.04167 %. Honolulu's GET also includes half a penny for the city's rail project, meaning Oahu lodgings assess a GET of.04667 %. Each county also has its own TAT of an additional 3 %, meaning the combined state and county TATs and GET starting Jan. 1 will add up to 18.167 % on the neighbor islands and 18.667 % on Oahu, Gibson said. In addition, Hawaii hotels also typically charge a parking fee that ranges from $20 to $60 a night, Gibson said. Separate resort fees also vary from $20 to $50 a day and include about 10 to 15 different privileges such as access to body boards and surf boards and hula lessons, Gibson said. Mufi Hannemann, president and CEO of the Hawai 'i Lodging &Tourism Association, told the Star-Advertiser in a statement that the organization supports the increase in the TAT 'because it has a clearly defined and purposeful intent that we can all agree on—to protect Hawai 'i's environmental resources, which are vital to our state's resilience, sustainability, cultural heritage, and preparedness for climate change and natural disasters. Just as importantly, there is a strong and direct nexus to the visitor industry—ensuring that this additional tax revenue will help preserve the natural and cultural assets that make Hawai 'i a world-class destination and support the infrastructure of our state's number one economic driver.' Hannemann said the new law 'reflects transparency and thoughtful balance, and we appreciate that the input of the Hawai 'i Lodging &Tourism Association and the broader visitor industry was seriously considered by both the Legislature and the Administration.' He agreed with Gibson that 'the actual cost to guests is often significantly higher once taxes and fees are applied.' Sarah Thomas, 30, and her girlfriend, Selina Ramirez, 41, of San Jose, Calif., have been paying $280 a night to stay at the Park Shore Waikiki on Kapa hulu Avenue for their first trip to Oahu. So if they return to the Park Shore after the TAT increases on Jan. 1, their nightly additional TAT cost would fall well below Green's $3 a night example. But they don't mind paying more to help address climate change in Hawaii. 'We're from California, so we understand the need to protect the infrastructure, ' Thomas said. Following this year's devastating wildfires in Los Angeles, Ramirez appreciates Hawaii's efforts to mitigate future wildfires following the Aug. 8, 2023, Maui inferno that killed 102 people, devastated Lahaina and caused $13 billion in damage. So Ramirez called herself '100 %' behind the plan to collect an additional $90 to $100 million annually to restore beaches and prevent further erosion and wildfire risks. And the couple 'would not hesitate ' to come back to face the higher TAT in the future, she said. They have already fallen in love with Oahu's beauty and the aloha spirit they feel. 'We've had a gracious welcoming, ' Ramirez said. Natalie Miller, 27, of Chicago, flew into Oahu from Kona on Wednesday morning with her husband and won't mind paying a little extra if and when they take another Hawaii vacation. 'I don't think I would even notice, ' Miller said. Her husband, Mitch Miller, 28, said 'another $3 won't stop me from traveling.' On the makai side of Kala kaua Avenue, Huma Mohammad, 36, of Redwood City, Calif., agreed that a higher TAT won't discourage her and her family from a second trip to the islands. 'I don't think so, if it helps the beaches, ' she said. 'That's what you come for.' She and her husband, Shawn Mohammad, 35, brought along their 2-1 /2-year-old son, Keyian. Shawn Mohammad said they've enjoyed learning about Hawaiian culture, along with the scenery. 'That's why trips like this are good, ' he said. Outside the Park Shore Waikiki—where she's staying with her husband and four others—Arlene Carwile, 50, of Hicksville, Ohio, said she would gladly make her second trip to Hawaii even if it means paying a higher TAT to protect Hawaii's environment. 'I would definitely come back, ' Carwile said. Everyone in the group agreed, especially Carwile's friend, Cynthia Smith, 77, of Ossian, Ind. Smith has fallen so hard for Oahu that she joked that she won't have to return because she has no intention of leaving. 'They're going to have to drag me away, ' she said.
