Hawaii implements eco-tourism tax to fight climate change
Hawaii is rolling out a first-of-its-kind lodging tax aimed squarely at funding climate resilience and environmental preservation—leaving the meetings and events industry to weigh the long-term benefits against rising costs.
In a bold move that could set a precedent for other tourist-driven economies, Hawaii lawmakers on Friday passed legislation that increases the state’s hotel and short-term rental taxes to raise nearly $100 million annually for environmental protection and climate adaptation projects. The bill, backed by Gov. Josh Green, is expected to be signed into law soon.
Starting Jan. 1, a new 0.75% surcharge will be added to Hawaii’s existing 10.25% transient accommodations tax (TAT), which applies to hotel rooms, timeshares, vacation rentals and other short-term stays. An 11% tax will also be levied on cruise ship passenger bills, prorated by days spent in Hawaiian ports. Combined with county-level lodging taxes and the general excise tax, visitors will soon face an effective lodging tax rate of 18.712%—among the highest in the United States.
For groups and planners in the meetings and events space, that translates into higher room block rates and increased line items for attendee travel. Yet Hawaii officials are betting that the state’s natural beauty—and a targeted investment in protecting it—will keep the islands appealing.
“The more you cultivate good environmental policy, and the more you invest in perfecting our lived space, the more likely it is we’re going to have lifelong, committed travelers to Hawaii,” said Governor Green. He argues that the modest tax increase will go unnoticed by most visitors, especially those drawn by the islands’ pristine beaches and lush ecosystems.
The revenue will be earmarked for environmental initiatives, such as replenishing sand on Waikiki’s rapidly eroding beaches, installing hurricane clips on rooftops to withstand extreme storms, and removing invasive grasses that fueled the catastrophic Lahaina wildfire in 2023. Importantly, this marks the first time a U.S. state has created a dedicated tourism tax specifically to combat climate change.
FURTHER READING: BCD TRAVEL ANNOUNCES FIRST END-TO-END SUSTAINABILITY TOOL FOR BUSINESS TRAVEL
For the business events sector, the move presents a double-edged sword. On one hand, planners increasingly value destinations that can demonstrate sustainability leadership—particularly as corporations seek to align meetings with ESG goals. On the other hand, concerns over cost remain top-of-mind.
“Will we be taxing tourists—and by extension, meetings and convention business—out of wanting to come here?” asked John Pele, executive director of the Maui Hotel and Lodging Association. “That remains to be seen.”
Rep. Linda Ichiyama, vice speaker of Hawaii’s House of Representatives, acknowledged that earlier drafts of the legislation included higher rates. “We heard the concerns about how do we make sure that we are able to sustain our industry as well as find new resources to address the needs for environmental sustainability,” she said. “So it was a balance.”
Industry stakeholders will be watching closely to see whether the tax reshapes how—and where—planners choose to host events. For now, Hawaii is staking its future on the belief that visitors, including the meetings market, are willing to pay a little more for a destination committed to preserving its paradise.
Any thoughts, opinions, or news? Please share them with me at vince@meetingsevents.com.
Photo by Andrew Davie on Unsplash
