Hawaii’s governor signed legislation that boosts a tax imposed on hotel room and vacation rental stays in order to raise money to address the consequences of the climate crisis.
It’s the first time in a government in the US imposes such levy to help cope with a warming planet.
Officials estimate the tax will generate nearly $100m annually. The money will be used for projects such as replenishing sand on eroding Waikiki beaches, promoting the use of hurricane clips to secure roofs during powerful storms and clearing flammable invasive grasses like those that fueled the large wildfire that killed 102 people on the island of Maui two years ago.
Hawaii’s governor, Josh Green, said on Tuesday that other states and nations will need to act similarly to address climate disasters roiling the planet.
“There will be no way to deal with these crises without some forward-thinking mechanism,” Green said.
The measure adds an additional 0.75% to the daily room rate tax starting on 1 January. Green said this amounts to an extra $3 tax on a $400 hotel room rate.
It also levies a new 11% tax on cruise ship bills starting in July 2026, prorated for the number of days the vessels are in Hawaii ports. That provision would bring cruise ship taxes in line with room taxes on land.
Travelers to Hawaii already pay a significant room tax. With the new law, the state’s existing 10.25% tax on short-term accommodations will climb to 11%. Together with other state and county taxes, visitors will pay a nearly 19% levy on their accommodations – one of the highest rates in the country.
Green has argued the increase is small enough tourists will not feel much of a difference. And, he predicted, given that many visitors travel to the state to enjoy the environment, many of them will welcome committing dollars to protect shorelines and communities.
Hawaii’s hotels, too, ultimately supported the bill, saying it would help improve the visitor experience. Green said the industry looked at “the greater good” for tourism, Hawaii and the planet.
Green initially proposed a bill that would put revenue from the tax increase into a dedicated fund, but lawmakers instead put the money into the state’s general fund. Their compromise measure calls on the governor to request funds from the legislature for projects in the following areas: protecting native forests, plants and animals; enhancing climate resilience; and mitigating the effects of tourism on the environment. Green said they will collaborate to implement the law.
Adrian Tam, a state representative and the chair of the House tourism committee, said the state must earn the public’s trust that it will spend the money transparently and in the best way possible. He noted Hawaii’s tourism economy relies on a brand that’s in part dependent on a pristine natural environment.
“The visitor industry will struggle if we do not take action now,” said Tam, a Democrat representing Waikiki. “There will be nothing left for them to showcase to the rest of the world if our beaches are decimated, wildfires have taken over our towns and hikes left unmanaged.”
