The state of Hawaii has increased its tax on accommodations, including for hotels and other short-term rentals, intending to use the revenue generated to address climate change.
Starting Jan. 1, 2026, Hawaii will increase the state’s Transient Accommodation Tax from 10.25% to 11%, according to the governor’s office. Each county may also impose an extra 3% tax, which Gov. Josh Green said they will do, bringing Hawaii’s total TAT to 14%.
The increased tax — dubbed “the green fee” and passed in the wake of the devastating wildfires that swept across Maui — is expected to raise $100 million per year. In a video address, Green called the increase “a true legacy moment,” and added that the “impact of travel to Hawaii will cover our needs as we deal with climate change and superstorms and all of the things that we have known to be true after the wildfires.”
Green said in a statement he intends to sign the bill into law.
“Hawai’i is truly setting a new standard to address the climate crisis, and I want to thank lawmakers for their unrelenting work these past two years in bringing this to fruition,” Green added.
In addition to raising the tax on transient accommodations, the legislation includes a new 11% tax on cruise ship bills, which will be prorated depending on how long a ship is in Hawaiian ports, according to the Associated Press.
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Hawaii isn’t alone in raising its tax on lodging. San Diego similarly increased its own Transient Occupancy Tax on May 1, establishing three continually increasing tax zones ranging from 11.75% up to 13.75% as travelers get closer to the San Diego Convention Center. That measure is intended to address issues like homelessness and fund street repairs, the San Diego Tourism Authority told The Points Guy.
The actual impact such increases have on tourism may be difficult to track, Joseph Marinelli, the president and CEO of Visit Savannah, told TPG. The Georgia city increased its own hotel tax from 6% to 8% in 2023.
Marinelli said there are many factors that impact tourism, “including macroeconomic headwinds and tailwinds that [affect] the overall travel industry, as well as local new developments like hotels [and] attractions, plus how we optimize our marketing spending to be more and more effective each year.”
In 2021, Tacoma, Washington, implemented a small hotel tax increase of one-tenth of 1% aimed at supporting housing services. The decision hasn’t really affected bookings, Matt Wakefield, the chief marketing and data officer for Visit Tacoma-Pierce County, told TPG.
“We’re already a budget-friendly spot in a fairly expensive neck of the woods in terms of hotels, so it doesn’t really alter the calculus for value-focused groups and individual leisure travelers,” Wakefield said.
But in Durango, Colorado, raising the tax has had the opposite effect. The city raised its Lodgers’ Tax from 2% to 5.25% in April 2021 and the budget for tourism and marketing increased. Following that, Visit Durango told TPG the city actually saw occupancy rates increase by 3% in 2022 compared to 2021.
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