Hawaii’s $16 minimum wage takes effect January 1, and, guess what, your next vacation just got more expensive. The largest pay bump in years will not help workers afford rent, but it will show up in your hotel bill, restaurant check, and tour costs anyway. Officials call it progress. Workers call it barely survival. And visitors? You will be the ones actually paying for it.
Tourism officials promised the wage increase would not affect visitors. Our research shows otherwise. Many hotels are quietly planning to raise rates between 8% and 12% for 2026, and several tour operators confirmed new “wage adjustment” surcharges beginning early next year. Resort breakfasts that cost $40 last year are now pushing $50. Every part of a Hawaii trip is being repriced to cover what the state calls fairness.
The math that doesn’t work for anyone.
At $16 an hour, a full-time worker earns $2,773 a month before taxes and about $2,300 take-home. The average Waikiki one-bedroom rents for roughly $2,400. That is negative $100 before buying a single grocery. Gas averages over $5 a gallon in Hawaii. And groceries? Let’s just say they are sky-high. Nothing in that equation adds up, which is why so many residents are moving away or doubling up with family.
A Honolulu grocery worker told us, “I have been here twelve years. I used to live alone. Now three of us share a two-bedroom. I still love Hawaii, but it’s harder to stay each year.” That is the story behind the headline, and it’s one the wage hike was never designed to fix.
Visitors will see it first.
We asked some hotels and restaurants across the islands how they are adjusting. Most already confirmed price increases starting in 2026. None wanted to be named. A Maui resort manager said, “We support the wage change, but it means our starting room rates will need to go up. We have no choice.” A Kauai restaurant owner described the same pressure. “Our breakfasts that were $18 last year may go to $24. We have to charge that just to pay staff and utilities.”
That reality filters directly into the visitor experience. Travelers already see fewer staff on property, longer waits for food, and resort fees that feel endless. What once looked like luxury now reads as fatigue. One longtime reader from Seattle wrote, “We want to support Hawaii, but we’re not sure we can justify these prices again. It’s just getting too much.”
Businesses squeezed to breaking point.
Hawaii’s small business owners are caught between compassion and collapse. They want to pay fairly, but the math leaves little margin. One cafe owner in Kailua said, “If I charge what I need to survive, no one comes. If I don’t, I can’t pay staff. We raised prices 12% this year and still lost customers.”
Profit margins are vanishing. Ingredients cost more, shipping costs more, and now labor costs more too. Some restaurants have added “sustainability” or “living wage” fees to bills, trying to be transparent. Most quietly raise prices instead. The result is the same: visitors paying more for a product that feels thinner than ever before.
The airline connection.
The wage story does not stop at restaurants or hotels. It reaches airports and airlines too. Ground handling crews, cleaners, and concession workers are also under wage pressure, which usually translates to service issues and higher airline operating costs. Hawaiian Airlines, now owned by Alaska Airlines, faces rising expenses as a large Hawaii employer. The result for travelers will undoubtedly look familiar: higher fares, fewer perks, and another layer of frustration on top of the comfort collapse already spreading across carriers.
The illusion of progress.
Politically, $16 sounds impressive. It lets Hawaii claim leadership on fairness while sidestepping deeper problems with woefully inadequate housing, energy, and infrastructure. The illusion fades quickly when you do the math. Gas still tops $5 a gallon on many islands. Groceries run up to 70% higher than the mainland. Electric bills routinely exceed $300. No matter how hard people work, the numbers never improve.
Meanwhile, visitors already sense that something feels off. They are paying more for less, from shorter restaurant hours to stretched staff and disappearing service perks. The aloha that once felt effortless now carries fatigue. As one longtime reader wrote, “We can afford to come, but it does not feel right anymore.”
When paradise prices everyone out.
Hawaii’s new wage just puts real numbers to what everyone already knows. Paradise costs too much. The dream has turned conditional, affordable only for those who can absorb it or already own a piece of it. Everyone else is just trying to hang on.
Economists say a single adult in Honolulu now needs at least $25 an hour just to cover the basics. That makes $16 less a milestone and more a warning sign. Without real change, Hawaii risks losing the very people who make it work. And visitors lose something too, as service, warmth, and connection fade under the weight of sheer survival.
The shared reckoning Hawaii faces.
Hawaii’s $16 wage rise is both too small and too expensive. It will not fix the real crisis facing the islands’ workforce, yet it will quietly make every vacation cost more. The people serving breakfast, cleaning rooms, and welcoming guests will still be living on the edge. And the visitors they serve will keep wondering where all their money goes.
That is the paradox Hawaii lives with now. The islands keep investing in the image of paradise while the real people behind it can barely stay afloat. $16 may still grab the headline, but the story underneath hasn’t changed. The math of paradise still doesn’t work.
Maybe the answer lies with all of us who love these islands. What would it take for Hawaii to feel fair—for those who live here and those who keep coming back?
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The sky is not falling. It’s quite the opposite. BOH editors have reported (many times) the goal now is to attract a higher spending clientele, and that is playing out in real time. Pay the workers $25/hr, or pay them more, it won’t matter because the people of means (and there are plenty to attract) will be there – and probably appreciate that the bargain travelers are gone. Like The Maldives or Seychelles, the more exclusive the resort, the more rich people are clamoring to get in. It’s a smart move that will pay off for the resorts and hopefully locals, too. As a famous movie businessman once said: “Nothing personal. It’s just business.”
Well, here we are, workers to get a pay raise. They now earn minimum wage almost equal to that of workers in CA. Only in CA nobody is getting ‘rich’ on that wage, even with prices significantly less in CA over HI, even including rent.
HI will eventually price itself out of most middle-class visitors vacation plans, and will return to the ‘glory days’ of when only the affluent and famous being willing to part with the funds needed to enjoy their visit. This will put a lot of folks out of work, as only the ‘best’ hotels and restaurants will be able to stay in business. Fewer flights to HI, but the seating will be ‘first class’, as befits the quality of the customers.
Bad news for the working folks of HI? Yup, sadly, and it’s not their fault. Credit the merchants and the hotel owners, ‘grazing in the grass’ of visitor money, unconcerned about the ‘worker bees’ they employ, enjoying fat 6-figure plus pay checks as all that income flows to the lower 48.
The answer is simple. Hawaii governor disolved the tourism board and took control of the money. Residents need to look closely at city, county and state policies. Next you look at the polictican responsible for outting these polices; and vote those policitians out of office if you want change. Educate Hawaiin residents. Your politicians vote and establish fees on everthing and, residents cannot vote yes or no on fees; fees are a tax. Your politicians know residents will vote no for incresed taxes so your politicians have a free hand with fees. Your vote matters for the future of ha residents, the economic survival of Hawaii and your tourism. I go to Hawaii 2x each yr and visit many times last 30 yrs.
I get that small business get pinched and leaves them in a tough position. The real problem though is that the big corporations don’t pay their share of the burden. The tax breaks they get is made up for by residents and guests. The endless squeezing of every penny to increase profits for shareholders is out of control. Less service for more money. People will stop coming, in fact it’s already happening. They’re paying for the bloated rail project. Theyre paying for our leaders inability to balance the ledgers, and they’re paying for the greed of the corporations. We pay for all that too. The corporations that send our food and goods are making record profit, the shipping companies, record profits, the fossil fuel industry, record profits, corporate hotel owners, record profit. Meanwhile prices for everything outpaces real inflation and inflation already outpaces wage increases. What are they going to do when no one can live or visit here? Seems like they want to find out.
Hawaii is an expensive place to live or visit due to it’s distance from the mainland and because of the Jones Act (Merchant Marine Act of 1920) that says foreign vessels cannot transport goods between two different U.S. ports. This is very hurtful to Hawaii as well as Puerto Rico. There should be a fair living wage paid to all full time employees everywhere. If a tourist going to Hawaii can’t afford to pay a price for things that support a worker’s right to a living wage, they shouldn’t go to Hawaii.
Maybe a different worker is needed. I be said for a long time these jobs at this rate were teenager jobs to train them into the workforce. These may never have been full time worker jobs.
At $16 an hour, a full-time worker earns $2,773 a month before taxes and about $2,300 take-home. This would work with teenagers filling these jobs and higher wage jobs going to these workers unable to live on this wage.
Sorry, but you are exempting the ‘corporate types’ who are raking in all the big money. Five hundred plus dollar a night rooms should be able to allow corporate to pay a decent living wage. The visitors are doing their part, and corporate is raking in all those big profits and giving bonuses to the guys on top, and making the stockholders happy, a major corporate concern. Don’t throw this on the visitors, don’t be an ‘elitist’.
The answer lies at the feet of a totally dysfunctional, incompetent and corrupt state government. For example, consider the millions ( billions?) of dollars Kauai contributes to the state the Black Hole coffers in Honolulu, But in return Kauai County will receive 1/2 of 1 percent ( that’s right 1/2 of 1 percent ) the State biennial budget in return. That explains everything. It’s not up to “We” yo fix anything. It’s up to Them in Honolulu.
Hotels already pay way more than $16 so there would be no impact. Try to book a room or rent a car in Hawaii and look at all the taxes and fees that are added on. This is what make Hawaii an expensive destination without any benefit to the worker or business owner.
More problems in Hawaii. There are many tropical locations with better customer service, more friendly locals, and cheaper/ better accommodations.
We use to be regular visitors to Hawaii but no more. Best move we ever made.
I enjoy dining at home and entertaining. Savings for sure.
Instead of going out for expensive dinners, my friends and I choose the many selections of amazing Happy Hours in the area 🍽.
Doesn’t necessarily mean “drinks”. The best ones have incredibly delicious food choices at reasonable prices.
Certainly is an option and fun.
Aloha
Sharon
🌺 🌺 🌺
You just laid out the perfect reason why forced minimum wage increases fail…it causes the price of everything to go up. The wage increase loses it’s value in just a year or 2…it creates a type of inflation. Unfortunately, Hawaiians are dependent on these type of entry level jobs that are more for the first time worker rather than the provider of a family. Until Hawaii can create a business friendly environment, it will continue to have an economy that outpaces it’s wage earners
For 25 years we visited any one of the islands every year. We liked Maui the best because we stayed at a condo in kaanapali and enjoyed the beach front restaurants in Lahaina. We have not returned since the fire and since condos are banned, we don’t plan on visiting Maui or Hawaii again.
Needs to be $25 an hour! Off island investors need to reset their profit expectations. Legislators need to represent our workforce and get them a living wage. Right now!
I’ve had this “discussion” with a lot of people over the years. The minimum wage was never meant to be an amount that someone could solely live off of ie pay a mortgage/rent, car payment, groceries etc. It’s initial purpose was to pay an amount as a supplemental type of job, such as a spouse going to work for extra household money or for students to be able to get a job and make some $$ while going to school etc. Regardless of where someone lives minimum wage, by itself, will not satisfy income requirements. Anyone who thinks they can live off of minimum wage solely is sadly mistaken.
Perhaps the residents should vote to put the legislature on ‘minimum wage’, and monitor their other, ‘supplemental’ income. Why not have those legislators share the ‘pain’ of the working class, then they could better recognize the life-style they have to deal with? If the people of HI don’t get rid of the indifferent politicians running their state, who is to blame for the lack of change???
I believe Hawaii’s fiscal crisis is irreversible. It’s like a self-licking ice cream cone- political jargon for a self-perpetuating system that has no real purpose other than to sustain itself. Raising the minimum wage means businesses must raise prices, which means fewer customers, which means less revenue, which forces businesses to raise prices further, which drives away more customers, which means even less revenue, and on and on until the businesses are forced to close. Minimum wage benefits lower income earners, but it also affects middle and high income earners because they must pay more. It can also cost the higher income earners their jobs because businesses might have to lower their labor costs. Raising the minimum wage for low income workers sounds good politically, but it must be examined in light of its impact on businesses, productivity, inflation, and middle/high income earners.
Oh by the way if wages go up and prices go up then that will impose a higher tip amount that residents request when prices increase. Not to mention more for the state in their excise sales tax and state TAT tourists Accomodations tax. Never heard of the sustainability fee or the living wage fee. Were these just made up or just a sympathetic thing? Now IMO the island oxygen fee or the sunshine fee don’t seem that far out of reality.
Living wage fees and sustainability fees. That’s insane. In my state when minimum wage went up. Groceries went up. Gas went up. Utilities went up and especially rent went way up. The only winner is the federal and state governments that now imposed a higher tax burden on your income after your standard deductions are applied. Owe more taxes to the government at the end of the year and the tourist’s pay more to eat, dine, lodge, as well. IMO lowering rent, prices, and the cost of living in Hawaii would have been a better option. Now a income increase will just make it more expensive to live in Hawaii for residents and reduce the amount of tourism.
If it takes $25 an hour to live in Hawaii, that’s what they should be paid. I realize it’s a tough choice, but I’d rather my money go to people than greedy large corporations. I will pay the higher room rate, higher breakfast, buffet rate, whatever, as long as I can. In the meantime, with $16 an hour I will make sure to tip generously where and when I can. Servers, housekeepers guides. They need our help.
Yes, $25/hour would be ‘nice’, but unfortunately, unlike corporate hotels, etc., the small business people may not be able to afford that type of hourly pay and stay in business. There are a lot of vacant store fronts on Oahu, and Maui, have you noticed? Ever wonder why? HI is pricing itself out of small business, ones run by locals, not corporations. The question keeps coming up: “Where does all that money go???”. No one has come up with an (honest) answer. We are still asking . . . . .
Affordable housing and a minimum living wage are both myths. As wages rise rent and all other living expenses rise.
Yes, in some cases yes, in others, people don’t want to share any of the profits they are getting and enjoying, and a few dollars an hour is an easy excuse to raise prices so they keep enjoying nice profits.