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Maui Accommodations Halt As Hawaii Looks Beyond Tourism

The Maui County Council has just enacted a controversial bill that will result in new Maui accommodations being halted for the next two years. That came as an override to the mayor’s prior veto and thus becomes law as Hawaii re-approaches record tourism numbers.

Mayor Victorino felt that Bill 148 would have unintended and far-reaching consequences (such as creating more illegal vacation rentals) and that it was done without adequate public input. He said yesterday, however, that “we need to move on and focus on the future of our people and our commitment to economic diversification and recovery from this crippling pandemic.” More importantly, he said, “we need to look beyond the hospitality industry and improve the balance in our economy through support for industries such as diversified agriculture, arts, technology, wellness, cultural education, and environmental restoration.”

We who live in Hawaii are always attracted to the idea of economic diversification. But when it comes to agriculture and technology, for example, for a multitude of reasons, those simply aren’t going to happen. Can the other areas mentioned, arts and wellness provide substantive alternative financial support for Maui’s economy?  

Hawaii residents aren’t of one mind regarding the future of island tourism, with thoughts ranging from curtailing tourism by any means to embracing it as the state’s lifeblood. Beyond tourism, the reality today is that there are limited other jobs in Hawaii, other than government and healthcare.

More than half of Maui’s real property-based income is derived from visitor accommodations.

In that regard, the Council’s chair said that “nobody has come up with one single idea on how to replace revenues from the visitor industry… We need to be careful on how we scale back on that industry before we have something to replace it with.”

This new moratorium will remain in place for either two years or “until legislation implementing appropriate recommendations… establish a transient accommodation limit categorized by type and by community plan area.”

Bill 148 was intended to counteract the rampant growth of visitor accommodations and the concomitant explosion of tourism on Maui. The new halt doesn’t impact existing Maui accommodations or ones already in process which have received final approval.

In addition, there are nearly 7,500 vacation rentals on Maui within apartment zoning areas, that could be phased out. That, however, remains undecided at this time.

Maui isn’t alone.

In a tangentially related development, we reported recently that Kauai has partnered with both Airbnb and VRBO to bring a halt to non-compliant rentals. Those rental giants now prohibit listings that don’t feature the officially approved transient vacation rental status. In addition, they are reporting to the county all rentals that are present on their websites for compliance validation.

In Honolulu, the planning commission has approved measures to ensure the elimination of vacation rentals in residential neighborhoods. The goal is to convert those to residential long-term rentals.

We look forward to your input.


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20 thoughts on “Maui Accommodations Halt As Hawaii Looks Beyond Tourism”

  1. A wellness opportunity may be nursing and other medical specialists education at the community colleges and universities. Build the Healthcare community, and perhaps facilities too. Tourism isn’t going to go away, and neither is Covid and its iterations.
    Thank you and Mahalo,
    Tricia H

  2. Seems like there needs to be a balanced approach. Unfortunately, in this current political climate compromise and a willingness to work together for a common good is next to impossible. I am a tourist and have been visiting for the past 5 years.

    One thing I do know is that when politicians make arbitrary decisions there are always unintended consequences, which many times have dramatic financial impact on taxpayers.

  3. Mahalo Beat of Hawai’i for having this forum to discuss goings on.
    I’m constantly amazed at the arguments that take place on here.
    People need to realize that they’re most likely NOT going to change each other’s opinions.
    That being said, I feel that the politics are incredibly Lōlō.
    Stay blessed guys and keep being awesome!!

  4. No more shortsighted ideas. You can’t complain about tourists from one side of your mouth with no solutions from the other side. Ask any other island natios.
    Financial incentives, cryptocurrency, business tax breaks, etc. If you can’t come up with another plan that I don’t want to hear one complaint about Tourists!!!

  5. Yet another example of our Bureaucrats not thinking things through. They want to reduce the number of vacation rentals. One solution they came up with is to force a homeowner to convert his little rental into permanent residential housing. What if you don’t want a permanent resident on your property?

    Happy New Year.

  6. Well, they could make pot legal like many other states and collect millions of dollars on taxes. So yes, there is one single thing that could replace the hospitality industry. They are just not allowing that to be an option.

    1. That is true but legalizing it has it’s consequences. I live on Long Island where it has been legal now for about a year. Since then I have seen a lot more DUI situations. I can smell it on the highways now. In New York City you smell it all over the streets now. Who wants to be around that unless you are smoking it yourself. It is not good for society as a whole. Over time it will raise both auto and health insurance rates as more peopke get hurt and sick.

    2. I live in California where pot has been legalized. I do not partake myself, but understand from reading that it has not brought in the tax revenue anticipated due to the heavily regulated and taxed business atmosphere in California. Illegal sales, from what I understand, are still king.

    3. No opinion on pot (it’s legal here in CA). Consider gambling. But, casinos without an otherwise tourist-friendly destination won’t bring in the $$$$. Seems to me the casino/hotel combo would be best for the economy of Hawaii. Perhaps the casinos would be restricted to certain areas. Hawaiian islands are far from large populations, with tourism as its best bet.

      BTW, “Visitors to the Hawaiian Islands spent $17.75 billion in 2019” So you want to trade billions for millions. I don’t think so.

  7. It should have been halted before they built that house in Napili and I I’m for stop the building of all these over sized hotels, we love Maui and we hate to see it ruined, keep it Hawaiian.

  8. In economics, we are taught to play to our strengths and let others do that which we are not able to do well and profitably. <<End of Part 1 of 2

    Hawaii was put on this Earth to be a place like no other. A place where people flock from around the world. Don't run away from your destiny. Embrace it.

    Treat tourists like treasure and all of Hawaii will be secure.

    1. Respectfully No!
      More than enough tourists for the island as is. More numbers are not sustainable and I don’t mean lodging. I mean the environment and the finite amount of land on the island. We are at max capacity…keep building and you will not like the Maui you have learned to love. You will create a Californian atmosphere and environment. We already have one of those on the mainland:)

  9. This is ridiculous. Hawaii is a tourist destination. And, that’s it. Instead of tilting at windmills, Maui should embrace it and work with the hospitality industry to improve it for locals and tourists alike.

    The more Maui and Hawaii in general attempt to stop the construction of lodging units and related services the more illegal activity there will be.

    In economics, we are taught to play to our strengths and let others do that which we are not able to do well and profitably.

    1. Sorry, Rod, that’s not what we are taught in economics — at least not macro-economics, which is what this is. We should take a lesson from the boll weevil infestation in the American south over a hundred years ago; that over-dependence on one sector of the economy leads to economic disaster when that sector is disproportionately affected negatively. Diversification of the economy led the South to what it is today, and it is a lesson state and local leaders are learning from today.

      1. I’m convinced the pandemic has negatively impact people’s ability to reason. Here, we have a veiled reference to tourists as invasive pests and victorino claiming ‘ arts, technology, wellness, cultural education, and environmental restoration.’ will provide revenue equivalent to tourist revenue. Please, folks, think hard before you bite the hand that feeds you and your families.

        1. Steve, I’m convinced too many people do not recognize or understand the connection between their personal wealth and a strong economy.

        2. I haven’t read the bill, but as far as I know, it is a prohibition on new accommodations. At some point the expansion was going to stop, either when all feasible land was developed or Maui becomes so degraded that people do not want to travel here anymore. Why not stop, or pause, before we get that far? Maybe think of this is a trial to see if we can determine the right number of accommodations for travelers and residents.

      2. Dan, I guess we went to different schools.

        “over-dependence on one sector of the economy leads to economic disaster when that sector is disproportionately affected negatively” A valid point – the object is to keep from becoming “disproportionately affected negatively.” But, even reliance on many sectors can destroy much of an economy, as the pandemic has done.

        Here’s the thing, countries should do that for which they have a competitive advantage. For Hawaii, that’s tourism and not much else.

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