Hawaii is no stranger to controversy over tourism, but a striking pattern has emerged. The biggest changes to how visitors experience the islands are no longer to be hammered out by legislators or even by the Hawaii Tourism Authority. They will be fought, one after another, in court.
The latest is the federal lawsuit challenging the state’s new “Green Fee,” which raises the hotel tax to 11% (19% including all application accommodation taxes) and extends it for the first time to passengers visiting by ship. While that case has drawn headlines, it is not the only one.
From Maui vacation rental ban plans to the state Supreme Court decision that hotels misled guests on tips, lawsuits are now the central arena in which Hawaii’s visitor industry is being reshaped.
For travelers, this means that everything from what you pay to where you stay, and even whether you can find the accommodations you want in Hawaii at all, could hinge on court decisions. For residents, it has created both hope and frustration: hope that judges might finally force accountability, and frustration that elected officials appear unable to set a clear direction for tourism on their own.
The Green Fee lawsuit is the latest example.
When Governor Josh Green signed the Green Fee bill in May, he framed it as a climate resiliency measure aimed at protecting shorelines, watersheds, and communities. The law is projected to generate $100 million annually, funded by raising the Transient Accommodations Tax from 10.25% to 11% and extending that levy to passengers on cruise ships visiting Hawaii.
With county surcharges, hotel and vacation rental guests will face a 19% tax increase starting in January. For ships, the law imposes an 11% tax on each passenger’s fare, prorated for the number of days the vessel is in Hawaii ports, and allows counties to tack on an additional 3%. Together, the charge can reach 14% of the prorated Hawaii portion of the cruise fare, starting in 2026.
Industry groups immediately pushed back, saying the measure was unconstitutional. The Cruise Lines International Association, joined by local tour operators and provisioning firms, sued last week in federal court, citing the Tonnage Clause and Rivers and Harbors Act. They argue the new surcharge unfairly burdens vessels, will drive visitors away, and could cost jobs across the islands.
But whether this particular lawsuit succeeds or fails may matter less than the broader picture: Hawaii’s tourism framework has become a magnet for litigation.
Vacation rentals in the courts.
On Maui, the sweeping ban on apartment-zoned vacation rentals is moving forward this summer and is already facing multiple lawsuits. Owners argue that the county’s timelines, 2028 for West Maui and 2030 for the rest, are unconstitutional takings of property that will devastate the visitor economy.
Renters worry their future reservations may be canceled, while residents, divided over housing affordability versus visitor impact, are waiting to see whether judges uphold or block the law.
One reader suggested that the outcome may not be a clear win for either side, but rather a compromise. Judges, they noted, could press for longer timelines or exemptions rather than an outright ban. Another reader pointed out that if courts rule the county’s actions are legally equivalent to taking property, Maui could be liable for massive compensation to owners, raising the question of how the county could ever afford such a payout.
The result will determine thousands of units and shape where visitors can stay in the islands. Once again, it is not the county council or the legislature deciding the fate of tourism, but the courts.
Hotels and the Supreme Court.
Earlier this week, Hawaii’s Supreme Court ruled against major hotels for pocketing service charges without properly disclosing them. Guests thought the charges were tips for workers, but they were not. The decision opened the door to significant payouts for employees and raised questions about the transparency of Hawaii’s hotels in pricing.
For visitors, it reinforced skepticism. As one longtime reader, Michael, wrote: “The geniuses here in Hawaii strike again. Have any of these people ever studied economics? Well, that’s not good…what should we do? Let’s raise taxes. Really?”
For workers, it was a rare win. For hotels, it was a costly reminder that courts are now willing to call out practices that lawmakers had tolerated for years.
Reader voices reflect the divide.
The lawsuits have unleashed passionate reactions. Mary commented that residents will never see the benefits: “Just another state tax that residents will never see any results from its implementation.” Ralph echoed the same frustration: “The more you tax the visitors, the fewer visitors you will see coming to Hawaii. It’s already happening.”
Some readers sought a middle ground. Anthony said he pays fees for parks and beaches gladly, but warned that balance is key: “If they’re not careful, they will drive away tourism for good. While that might please some, it will hurt many more residents than it helps.”
Others spoke with their wallets. Jackie, a former Kamaaina, wrote that new taxes are killing her desire to return: “We won’t consider visiting Hawaii anymore.” Gerry, who had visited for 35 years, added, “If this tax goes into effect, I will stop going to Hawaii. Greedy politicians. Hawaii will suffer as tourists find more friendly destinations.”
A few readers took the opposite view, saying visitors should expect to contribute more. Richard argued that if a couple of hundred dollars is a deal-breaker, maybe people should rethink the trip: “If ship passengers aren’t paying their fair share, maybe they should start.”
These perspectives show why the issue is so explosive. Some view unfair taxation and government overreach as issues. Others see a necessary cost of preserving the islands. And nearly everyone questions whether the money will actually be spent as promised.
Why lawsuits now dominate tourism policy.
It is no accident that these issues end up in court. Hawaii’s legislature has often advanced broad tourism measures without working out the details or testing their legality, leaving court challenges to fill the gaps. County leaders have addressed resident frustrations with sweeping bans or new fees, but many of these actions lack clear enforcement. And the Hawaii Tourism Authority has lost much of its influence, unable to chart a strategy that satisfies either residents or the visitor industry.
The result is a patchwork defined by injunctions, rulings, and settlements. Whether it is a judge deciding whether vacation rentals can continue or whether ship passengers must pay new fees, the course of Hawaii’s tourism is now being set in courtrooms rather than at the Capitol.
The stakes for Hawaii’s future.
For visitors, the steady drumbeat of lawsuits and pending court fights is unsettling. Will taxes and fees climb even higher? Will favorite rentals be outlawed? Will resorts pile on more surcharges? For residents, the questions are just as sharp. Will these new revenue streams actually go to shoreline protection, wildfire prevention, and housing, or will they disappear into the state’s general fund?
Bill and Karyn, longtime readers, voiced a sentiment that has surfaced again and again: “If you keep alienating by continuing to nickel and dime the middle-class, who make up the largest group of visitors, you are just asking for a financial disaster. Enjoy the rich people, Green, but seriously doubt this will end well.”
Another reader was more blunt: “Grifting off the tourists appears to have replaced surfing as the Hawaiian state sport.”
Where Hawaii goes from here.
The symbolism of waves in the article title is not lost on the reader. Just as the ocean delivers one set after another, lawsuits are arriving in steady succession. Each one reshapes the shoreline of Hawaii’s visitor industry a little more. The question is whether the state will regain control of the process, or whether the future of Hawaii travel will continue to be written not at the Capitol but in courtrooms.
What do you think should happen? We invite you to comment below.
Get Breaking Hawaii Travel News
Well, that was to be expected. It’s total chaos. Those politicians have no clue what they are doing. They are imbeciles. All the Hawaii issues can be easily resolved – especially housing for the locals – so many solutions. Yet, none are being implemented. So over-tourism my butt. I get daily emails to fly from the mainland to Hawaii are so much discounted prices that it’s practically free. Same with hotel deals. If that was the case, then the Hawaii State government should stop all discounted prices to be promoted and offered by both airlines and hotels in particular. All this bs is bogus. Locals ought to revolt. Same here, done with Hawaii. We have found new locations to travel to.
Done with Hawaii
The real reason they’re charging this additional green fee is to pay for the maintenance on the ridiculous windmills that dot the mountain ranges around Oahu and don’t generate nearly the electricity that we were led to believe and built to generate. So now we all get scammed with higher taxes to pay for non base load energy that just makes certain people feel good.
I have owned a condo on Maui for 37 years; I have paid my taxes to the State and to the County. My property and transient taxes have increased constantly and I pay them. If the County chooses to only allow long term rentals, which by the way, will not solve the housing issue for residents, millions of dollars and thousands of job will be lost. It is a dumb, poorly thought out option. Rental condos are not set up for permanent residents – no storage, poor parking, small units, rent too expensive.
Kind of hard to believe that these politicians are pushing the chips all in on issues that likely have huge negative economic consequences. Did any of these geniuses take an economics class in college?
Rule number 1: You want less of something, make it more expensive! Rule number 2: Don’t play at the high stakes table if you can’t afford to lose!
Rule number 3: Socialism works great until you run out of other peoples money!
Rule number 4: Everyone is tough until they get punched in the mouth!
hese tourist taxes will be wasted. Since Hawaii doesn’t want me to visit, I’ll go o somewhere else on vacation. You’ll get Zero taxes from me!
People in these comments wonder where all the tax money and fees they pay is going. Well, for starters, the mayor of Maui earns $245,000 per year. Each Maui county council member makes a little over $100,000/yr. The mayor’s salary is more than each governor of Hawaii and California. It’s obvious driving down South Kihei Road that very little is being used for the parks, roadways, housing, restrooms, towing abandoned cars, maintenance, etc…….things that will benefit both residents and visitors alike. Maui is starting to look very shabby. Instead the taxes and fees are being used for bloated salaries and retirement accounts, “special” studies, funds for crooked non profits, junket trips by politicians to “examine” things and promote Maui in exotic locations, etc.
Hawaii’s politicians are busy lining their own pockets and those of their friends!
If the prices of lodging, parking, food and park fees continue rising we will go elsewhere.
the people that are running the government in hawaii in my opinion are running tourist out ot hawaii. I will not be back.
No economy has ever been able to tax its way to prosperity. None. Ever.
IMO dealing with Hawaii is getting close to dealing with the devil. Hawaii holds all the aces and the tourist’s hand is a loser or a situation to fold immediately. It must be nice to own magnetic beaches that draw in tourist’s and reap the rewards of overpriced goods, lodging, and services.
Long time reader, first time commenter. I wish people who own STRs would stop claiming that they are such great job creators. I used to clean STRs when I lived there in the early 2000s and it was hard work for mediocre money and Zero benefits….my boss would often go through the properties before we got there to steal tips and good food/alcohol that generous guests left behind. It was under-the-table pay with unreliable hours. It’s OK for a second or third job but it is not creating prosperity and “good” reliable jobs like many owners claim. Many of the units would have been otherwise affordable long term rentals. I think there should be a percentage of properties that can be STRs, and people who still live on the property should have priority (vs. investment property where the owner is off-island). It is a Greed problem that is disrupting the balance. If owners are so concerned about supporting locals with “jobs”, provide them an affordable place to live instead.
Having a home here for 25 years and visting for over 30 years. My view is a lot of residents think the island will survive with out tourist. It will not. When the tourist disappear so will the money. Even people relying on goverment payments will feel the effect.
So you bought a condo or built a house in a residential area that was explicitly zoned residential, but because there was no sign out front or no front desk, you thought you could get away with degrading the value and the life of your neighbors by running a hotel.
Now, finally, the chickens are coming home to roost.
Tough tooties
That said, it boggles my mind that “activists” seem to actually believe that if they quit allowing that little sherade, suddenly all these vacation condos, built and priced for haoles will suddenly turn into “affordable housing” for maids, bartenders,and janitors
“So you bought a condo or built a house in a residential area that was explicitly zoned residential….”
No, we all bought condos that, through ordinances 5126, 5301, 5473, and 5502, had been codified in chapter 19.12.020 of the Maui County Code, thus providing any and all legal protections of the hotel-zoned condos.
Nobody “built a house” in a residential area, as none of the Minatoya properties are single-family homes, and the vast majority of the condos are in what is largely recognized as a “tourist zone”. And finally, there are condos in what are explicitly “planned Resort communities” slated for phase out.
You clearly have no idea what you’re talking about. Just like the Mayor and his shills.
I’m not speaking about the Minatoya or any other properties specifically. Rather, the general concept of buying residential property with the intent of using it as a commercial “hotel”, just without a front desk and a sign and either flying under the radar or flying where there is no radar.
It’s tacky at best and downright thievery at worst of peace and stability the rest of the residents bought into in good faith.
If you have property like that whose commercial use is legally grandfathered in, good for you.
The much more important issue here is that “activists” in local government think screwing over haoles by stoping this is an actual housing policy.
The lawsuits about STRs in this article are specifically related to the Minatoya properties, which don’t engage in any kind of “illegal commercial hotel use”. So whom are you scolding, shaming, and calling tacky and thieves? Your comment seems misplaced in the context of this discussion.
The large majority of these STR condos were purpose built as condo-hotels in the 70’s and 80’s. There was no deception, no under the table deals, and all done with 100% cooperation of the State and County. The real issue here is that the County has done nothing in regards to zoning, permitting or making housing accessible or affordable. This is a lazy attempt to grab property rights that is more like “malicious envy” on the part of many locals. There is no way that the County pulls this off without paying for “taking” these legally allowed property rights. I just don’t know where they think they’re going to get the billions of dollars necessary when they lose this case in court.
We have been timeshare owners here for 30 years, most of it on Kauai. We have had to pay the daily tax for several years (I actually wrote to the former govener to protest it several years ago when it was instituted). When we consider applying the tax to the cruise ship passengers, I am not totally apposed. After all, they are here in Kauai for 2 days, enjoying what we are paying for daily.
So cause you’re gettin shafted others should get shafted to? Why not stop the shafting all around…
What I am reading here mirrors what I am reading about Las Vegas. Greed is killing the goose that lays the golden eggs.
Who wants to go on vacations where everybody wants to sue everybody? Hotels getting sued. STR’s sueing the county. Wow. Does anyone realize the hotels have guest address, Names, credit card information and a drivers license as proof of identity? If the norm is to embed lawsuit central then are your sure you are safe of not being in the middle of one if you are a guest? Some say if you put your hand in the fire you will bet burned.
As a kamaina who has returned each year for the past 15 or so years I will not pay for visiting the beach or pay for something that has been free so the politicians can line their pockets which is what they will do regardless of the story line. They forget Hawaii has no industry so how will the residents support their families so sorry
This doesn’t make you Kamaaina… You’re Malahini.
If Maui’s mayor and council would focus their time and resources on finding real solutions to the affordable housing crisis, this issue could be resolved without Bill 9. Bill 9 is not the answer.
The tourists who stay in short-term rentals are the very people who support our local economy—eating at our restaurants, shopping at local stores, and booking local activities. Many short-term rentals are also managed by local companies, providing jobs for residents. Eliminating these rentals would damage Maui’s economy. No tourists = no jobs. And what is “affordable housing” without a job to pay for it?
Instead of taking the easy way out, Maui’s leaders should tackle the root problems: streamline the permitting process, cut the red tape, and invest in building truly affordable housing. If the same energy and money spent on Bill 9 were directed toward those solutions, Maui could realistically achieve affordable housing by 2030—without devastating its economy.
Thank you !!
Your post is one of the absolute best we’ve ever read here.
Extremely well written and is a solution economically that we wish the Maui County govt would read and react to it by solving the problems not being the problem.
Our local Ohana on Oahu, friends on Oahu, and friends on Maui have repeatedly told us that Hawaii needs tourism and that there is a way too make this work if the state and county would listen.
Sadly and unfortunately, tourism has been damaged everywhere across the USA and it will take people like you with a great economic plan to fix it.
Aloha
Take Care
The problem about politicians talking about “building affordable housing” is rampant across the country.
Built by whom and affordable by whom?
There’s an in depth article in yesterday’s Sunday Seattle Times about the billion dollar disaster that is “affordable housing” in Seattle and what happens when people who have never worked a day in their lives in the private sector, decide to play real estate developer with taxpayer’s money .
Notice the consistent common denominator here? Taxes. Guess what, Hawaiian legislature needs to get their collective head out of the ground and start getting creative on other source of income. You cannot continue to tax the golden goose, while still complaining about tourism. It literally is your own fault. So if you can’t get politicians to think outside of the box, you need new politicians. Ironically, Hawai’i needs to start “teaching people how to fish” so they can sustain their own lifestyles without handouts and safety nets. Government IS a business and never forget that.
I think you meant visitors will pay 19% in accommodations tax, not that taxes will increase by 19%, right?
While some residents are more than happy to bite the hand that literally feeds them (and their “valued” community), others welcome income and revenues that were extended to them through hard work and determination. The former awaits the government hand to fill the hat, the guitar case, or the bucket simply through a warped and distorted sense of entitlement, justified for simply existing on the island(s). Maui wants all the treasures of tourism without any of the inconvenience-revenue, infrastructure, affordable housing, and financial assistance derived from an industry they want to expel.
Locals complain that tourists act “entitled”, but nothing screams entitlement like demanding all the benefits of something without any of the costs. I hope with every ounce of my being that Lahaina Strong and Bissen get what they have been demand. Locals looooved Maui during COVID, but let’s try that without billions flooding personal bank accounts and see how fun that is.
A long time ago, I suspected that the accommodations/hotel industry held inordinate sway with Hawaii’s governing bodies. As new hotels continued to be built, and the turning of Waikiki into another hotel lined Miami type beach resort, I became convinced that the hotel industry was the ‘power-behind-the power’ in Hawaiian politics. After all, who has all the real money in the islands? Who, with their gazillions of bucks, is best positioned to influence government decisions? Not your everyday tourist, or in reality, the residents. You locals can’t ‘afford’ them, but big corporations can. That’s how decisions are reached in your island group. And during the next election cycle, those smiling faced pols will complain about the same problems you locals complain about, and swear they will make things right for ‘the real Hawaiians’ if elected. And so the cycle is again repeated. Good luck, Hawaii.
Aloha spirit indeed. Hawaii is becoming less and less attractive to visit – a “one and done” kind of place rather than the annual or biennial destination it once was.
Hawaii and Vegas share the same mentality and suffer…their base is the middle income tourists but cater to the 1% so enjoy the downturn until you wakeup.
I for one will not be visiting Maui again after this year. The constant grab for tourist money is out of control. I have been going to Kihei since 2008 and in all that time I have no idea where all the tax money I spent went.
I see no repaved roads, no sewer improvements, no infrastructure improvements, nothing. All I see is the same money grab by the corrupt politicians. I do not mind the taxes; what bothers me is how they are used, or in my experience, not used.
I refuse to give them any more money; as much as I love Hawaii i am done supporting the people in office. I suggest the people there wake up before their politicians bankrupt them.
While it it would nice if the islands could be self supporting for now they need tourism revenue and even the wealthy tourists get tired of being ripped off. When they stop coming it may be too late; the time to act is now, Elect people who can show they have financial experience and hold them accountable.
Well said Rich,
I have been going to Maui at least once a year since 2007. No water in fire hydrants, a homeless encampment next to our condo complex, abandoned cars (probably from tourists or STR owner types), public facilities at the beach that have never been serviced. The politicians and bureaucrats are destroying paradise. The locals will be left in 3rd world squalor conditions and the politicians will have their pockets stuffed with US dollars.
You think tourists or str condo owners are renting or buying cars and then abandoning them?
I suspect that was meant tongue-in-cheek.
The limits to levy taxes by local and State governments are defined by a century of Court precedent. Hawaiian elected officials are willfully oblivious.
While it would be nice if the islands can be self supporting. Thank you! Someone said it. I say if they can go back to being self supporting or sufficient. It would be rough for so many. But maybe not impossible. Thank you for thinking about the residents. We live here. The visitors are crying about the cost… We can’t afford to live here. We need more visitors to show their concern for the people of Hawai’i.
Will someone please tell me how these fees/taxes will affect time shares. I believe time shares are owned and not rented, so why should these extra fees apply?
It sounds like Maui county officials will certainly be challenged in the courts and have “stepped into something “ that is way above their “pay grade” or real level of expertise . This needs to be fixed and it will -but with much “pain” for residents and visitors alike. Let’s all use some common sense!
Aloha,
I believe I have identified the governance issue. Consider the training and experience level required to be an airline captain, a surgeon, and electrical engineer, an architect etc. Politicians, especially party leaders, are selected by mob rule. No. Experience. Required. The mob that keeps installing these freaks are the other half of the problem…
Mahalo
The biggest issue is that all the money raised will go into the hands of the politicians and their friends pockets. They will fund studies, money laundering schemes, and beach erosion will continue. I love living here, but even residents are not exempt from those taxes. If Maui bans STRs I will not go.
We’ve been coming every year to Oahu past 25 years except during Covid. We love coming just to relax , enjoy the food and interact with the locals who we found has always been friendly, you get what you put out the way you treat people. I understand why the Green Fee was created and my concern is it going to be use to better the Islands and the well being of the people who lives here or is it going to line Government and hotel owners pockets?…For instance during last years hotel strike, we pay premium to stay at the hotels along with a resort fee that gets us what? But yet they can’t pay their workers a living wage? We are fortunate we will be able to still visit every year even with the rise in cost. Just hope this fee will go to where is suppose to help and to not some Government bureaucracy baloney….