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.
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The governor is clueless, and he is delusional to think visitors will continue to come. Visitors are already choosing other options. Numbers are down and will continue their downward spiral. The governor is determined to kill the golden goose (visitors).
The governors pandering to the voters is eventually going to put them out of jobs when visitors stop coming due to the continual high fees placed on them. The residents need to pay enough taxes to take care of their communities not the visitors. All he seems to want to do is cut taxes for his voter base and make tourists pay for his misuse of tax money, once again with this proposal there is no defined oversight or metrics.
Hawaii residents currently pay the highest taxes in the country.
You have to remember that Hawaii has the highest cost of living and many have moved to the mainland because of this.
Green has gone about this problem the wrong way, and it’s not fair that visitors are saddled with excessive taxes. Hawaii govt has been corrupt for decades and I don’t see this changing in the near future.
Myself, I was born & raised on Oahu and left 35 years ago. It breaks my heart that some of my family who still lives in Hawaii have to deal with ridiculous prices, high taxes, rent, gas, etc.
What projects will stop/slow climate change in Hawaii? I hear all the time that we need to spend money but I never see any projects that would Actually do anything. I think it’s just a money laundering scheme… the monies would just end up in the general fund.
Sure, the fees keep going up. Hotel rates keep going up. AirBnB rates keep going up. Car rentals keep going up. Airfares keep going up. Restaurant prices keep going up. Everything keeps going up. But somehow there are always people to fill the rooms. There’s always someone who will pay. If you don’t go, someone else will.
Maleko, you’re so right 👍
Actually, Maleko, that’s not altogether accurate. If you’ve ever worked in the hospitality industry you know that the term “occupancy” means everything. For example, places like Hilton and Hyatt have so much staff that they don’t even break even below 80% full. And it’s minimal profit up to 90%. Also remember that the other forms of rental units have to pay their mortgage and insurance even when empty for a month. Also, with low occupancy comes layoffs of local employees. So avoiding more taxes and keeping more tourists is good for Hawaii all around!
Keep dreaming. Keep saying that in the unemployment line!
We love going to Hawaii. We have gone every year for a number of years. This is the first year we haven’t. Everything is getting so expensive with hotels and fees. There are other places that seem to be more reasonable. It’s unfortunate because it’s a beautiful place but not the only place to go.
Having recently spent 2 weeks on the beautiful islands of Oahu and Maui, I felt so comfortable. Although while on Maui there was much talk about the delays and slow processing on the reconstruction of the harbor and the livelyhood of those who depend on tourism.
I have been to Maui at least 20 times. I will stay home until all these unnecessaries fees go away.
We are heading to the Big Island in June with the whole family. Six adults. We last visited 12 years ago. We scaled back our trip to one Island instead of several and down from 10 days to just a week. The airfare was the first shock. The accommodation (same condo we stayed in 12 years ago) was up but not terribly but the taxes both on the condo and rental car are nasty. If state government tries to implement a “green tax” on top of all that this will be our last trip. Europe with the exchange rate is a much better value and I will look at Tahiti or Bora Bora for my Tropical fix.
We’ve traveled to all the Hawaiian Islands annually since 2012. The last trip in December 2024 we experienced the rising costs that are affecting all aspects of visiting the Islands. Extra taxes and fees on everything. From rental cars, to lodging, food, parking, and beach access. Even as much as $25 just look at panoramic views, and now a toll fee to drive the road to Hana. It’s becoming a not go to place given the increase in fees. Especially when considering alternate destinations. It’s unfortunate, and it almost seems that the HI government isn’t interested in maintaining their most valuable asset. Tourism.
Hawaii is going to struggle for many more years. You can’t keep unloading on your visitors. There are many more options than Hawaii.
Add the TAT to the Property Tax increases over the last 20 years that I have been spending my meager fortune in Maui supporting the locals and it is serious Inflation that I may not be able to continue. I’m a retired school teacher, and retirement is getting more and more challenging. I may soon just have to ding some rich businessman to take over my condo.
Me too. My condo will be sold to another rich mainland guy.
It seems, especially on Maui, the hotel industry is getting its way. With lowered competition from vacation rentals they have raised the price of a hotel room dramatically. Even with lower occupancy I bet they are making better profits. Less housekeeping, utilities, etc. With the hotels in charge it’s now take it or leave it. Looks like some have chosen to leave it. And our money goes off island.
Why do we keep electing these people creating this situation?
my wife is a devoted fan of hawaii having been to the islands 17 times over the past 30 years. however it was apparent to us that future trips are becoming less certain due to the aggressive pricing all across the islands, particularly Maui. Hotel rooms that used to cost in the low 300’s are now closer to $1000 and generally don’t include resort fees, parking,taxes, and other miscellaneous costs. Even at restaurants kitchen surcharges are beoming rediculous. Please pass these comments along because I fear the Hawaii may be losing two devoted visitors
Hawai’i, just declare a covid like shutdown and stop the lower income tourists. Seems like what they want. Of course, after the previous shutdown they were screaming they need the money. And this time they won’t get all those federal dollars. Costa Rica is booming as are the Islands off the South coast of the US and Mexico. Much more affordable. My neighbor just flew to France and Portugal for less money than what the same time in Hawai’i would be. She said longer plane ride, but great service.
You are killing the goose that laid the golden egg with nonsense visitor taxes. Keep it up, I won’t be visiting!!!
Time for an audit. It’s long overdue. But who will do it? Voters apparently think the state officials are doing a good job, otherwise they would’ve voted them out long time ago. Looks like they got what they voted for.
We used to go to Hawaii every year for 30 years; now we are not going at all. Prices are just too high. We feel like we are being “gouged” and frankly we are.
I think we will just stay home and pass on Hawaii permanently
How much is enough? Visitors to Hawaii are already subsidizing each and every resident to the tune of $1600 a year under the current tax structure. The government of Hawaii has got to be more transparent and prudent in how these dollars are spent. Visitors are not going to pay unlimited tax increases without more positive, concrete results in the holiday experience.
Hawaii is really not worth the price anymore. The arrogance behind continual fee increases and additions makes the experience at best just ok.
Green is getting, along with the legislators, a 61% salary increase.He will be, the highest paid governor in the states.Yet, he continues to use tourists as the ultimate cash cow. NO, J.Green, you are dead wrong
Aloha Richard,
The answer to your question as to “why these politicians want to destroy the tourist industry,” is to put it bluntly; they’re globalist elitist liberals who want everyone to live in uniformity rather than unity. They worship at the altar of the “state” and as committed socialists, want to control, through government mandates, how you live all aspects of your life from the cradle to the grave. They despise the capitalist economic philosophy, but hide their contempt for it to stay in office.
It has never worked anywhere in the world where it has been tried, and it absolutely will not work in Hawaii. On the mainland their failed government philosophy can be seen in California, New York, and Illinois.
Common Denominator, One Party Rule!, look at California, Illinois, New York, Massachusett’s, Oregon, Washington State!
The fire were terrible.
I understand all of the pain and suffering.
Even deaths of loved ones.
After that tragedy, people were told to stay away. Even celebratories
Joined in to say we don’t want tourists.
That was followed by “locals ” basically saying they hated tourists.
There was also messages that said if you come you must understand and respect traditions.
Not much of a welcoming message.
Then the purge to eliminate weekly rentals.
Several moves to increase costs and fees.
Wonder why tourism is down?
Hawaii doesn’t want tourists but depends on them for their economy.
Other countries have their own traditions also, but there is no demand to be so respectful.
The island are beautiful but they are not that unique.
Keep raising prices and tell people you don’t want them and guess what happens.
You are killing the goose that lays the golden egg.
Higher prices mean less tourists. Just what the native Hawaiian’s want and wish for. I was told by a native local that most people live on Hawaii have some state disability assistance, unemployment, or have a good lawsuit settlement in their back pocket. Green only wants super wealthy people who don’t give a rip about how expensive some hotel is or where money is concerned. To a multimillionaire you’re talking about chump change. More privacy, higher prices to obtain more state revenue, Less workers needed to accomodate visitors and because of it more relaxing better tips. As long as the state can cover the state assisted programs budgets then the goal is accomplished. Just keep raising prices and receive more tax money so the rich can only afford to visit. Sad very Sad but this might be the future.
“the extra fees aren’t improving the experience,” says it all. We’ve been choosing Maui over almost everywhere else for decades, but no more. The things tourists have been required to do to “help” haven’t produced results. Nothing happens with erosion relief, though many plans have been proposed, power lines in the fire zone are still being put above ground! Insane behavior when that was a main factor in the fire. We want to help, but not if you squander our good will and money.