Hawaii Governor Says $25 Tourist Climate Fee a ‘Small Price to Pay to Preserve Paradise’

Hawaii Gov. Josh Green signs gun control legislation in Honolulu, Hawaii, on June 2, 2023. Audrey McAvoy/AP Photo

Hawaii’s Democrat Gov. Josh Green is calling a proposed climate fee on tourists a “small price to pay” in order to preserve the state’s natural habitat. The hotel industry claims the charges will add more burden on their businesses.

Last month, a bill was introduced in the Hawaii state legislature that seeks to impose a $25 fee for all visitors who check into hotels and short-term rentals as part of a climate protection initiative. “It’s a very small price to pay to preserve paradise,” Mr. Green said in a Feb. 18 interview with The Wall Street Journal. The fee places the responsibility of Hawaii’s natural resources on visitors and also raises awareness about climate change, he said.

Mr. Green expects the fee to generate $68 million per year, with the funds being allocated towards establishing a state fire marshal, installing fire breaks to safeguard communities, and aiding in disaster prevention. Half of the funds will be directed towards disaster insurance, without which some of the high-risk areas in Hawaii face challenges in rebuilding and attracting investors, according to the governor.

Supporters claim that the fee will help Hawaii’s beaches and state parks and that tourists will be receptive to it. However, there are concerns the extra charge imposes an additional hardship on the struggling hotel industry.

The Hawaii Lodging and Tourism Association opposed the measure. “We would issue caution about imposing additional financial burdens on the state’s largest industry that provides the greatest number of jobs for our residents,” the group said, according to news outlet Honolulu Civil Beat.

Lobbyist Kekoa McClellan, who has testified on the issue on behalf of the American Hotel and Lodging Association, said the current bill will only end up extracting the new fee from law-abiding hotels and that the fee would not be imposed on the tens of thousands of illegal vacation rentals in Hawaii.

“We know that none of these illegal operators will pay this fee,” he said. The association has asked lawmakers to “consider removing that burden on our hotel properties.”

The $25 climate fee proposal comes as the state sees a decline in tourist numbers following the Maui wildfires in August last year, which killed at least 100 people.

According to a Jan. 30 report by Hawaii’s Department of Business, Economic Development, and Tourism, visitor arrivals “have decreased in four out of the last five months” since August 2023. In addition, “visitor spending recorded five straight months of decline compared to 2022.”

During his State of the State address last month, Mr. Green said that $25 is “not too much to ask of visitors to our islands” and that the funds will be invested in “beach preservation, fire breaks, and other prevention measures to help us avoid tragedies like the one last year in Maui.”

If the $25 climate fee is implemented, it will be the first policy of its kind in the United States. Countries like New Zealand and Greece already charge a so-called climate fee.

Taxing the Hotel Industry

Some lawmakers have suggested hiking hotel tax rates to raise more money from tourists. Hawaii already has one of the highest state hotel taxes in the United States.

Rep. Linda Ichiyama (D-Hawaii) introduced a bill seeking to raise the visitor tax rate by 1 percent and impose an additional surcharge on accommodations per night. The last time the visitor tax was raised by 1 percent was in 2018.

“I think ultimately, we know that we need to invest more in protecting Hawaii’s natural environment and that’s the reason why people come here, to enjoy our beaches, our hiking trails, our parks,” the lawmaker told Hawaii Public Radio.

The Hawaii Lodging and Tourism Association opposed the proposal, with the organization’s vice president Jared Higashi recommending the imposition of charges at tourist sites rather than raising hotel taxes.

“That’s kind of the model that we’re looking at, right? Charging people going into site-specific areas, especially those with heavy traffic, and using the funds that are collected at those sites to maintain and operate that specific site,” he said. “So, we know that the money that’s being charged there is going back to that specific site.”

In an interview with the New York Post, Rep. Sean Quinlan (D-Hawaii) said that the state doesn’t have enough money to manage all the places that are seeing a high number of visitors. For instance, people are seeking out obscure sites after seeing them on social media.

“It’s not like it was 20 years ago when you bring your family and you hit maybe one or two famous beaches and you go see Pearl Harbor. And that’s the extent of it,” he said.

“These days it’s like, ‘Well, you know, I saw this post on Instagram and there’s this beautiful rope swing, a coconut tree.'”

Tourism is a key economic driver for Hawaii, accounting for 23.6 percent of the statewide economy. Hawaii, which is home to 1.4 million residents, welcomed over 9.5 million visitors last year.