Hawaii Imposes Green Fee On Tourists’ Hotel Stays

Aiming to address the growing impact of climate change, the Governor of Hawaii has signed a new law to collect the state’s transient accommodations tax (TAT) from visitors staying in Hawaiian hotels and their short-term rentals tax by 0.75 percentage points, bringing it to 11%.

The ‘Green Fee’ will start from 1 January 2026 and a $400 night stay would cost an additional $3. Even cruise ship passengers will too, prorated for the number of days their vessel is in a Hawaii port for the first time.

The fee is expected to raise between $80 million and $100 million a year for projects that include fortifying fire breaks, upgrading technology, and combating erosion and invasive species. However, it is far below the over $200 million a year that Hawaii, the happiest state in the US, would need.

According to media reports, Justifying the decision to collect ‘Green Fee,’ the Governor said that if they don’t do proper destination management, don’t tend the beaches properly, and don’t make sure the parks are perfect, people will stop coming here.

Green said his climate advisory team will work with lawmakers, state agencies and land owners to set priorities. The non-profits will be able to access grants from the fund and the feedback from local residents will also be considered.

“There is exposed piping. There are some properties, frankly, almost all the oceanfront properties are struggling to keep up with the projects, but where there is public interest, which is people coming to Hawaii, their safety is on the line, and the revenues would otherwise go away if we lose a property,” Green explained.

The funds are expected to help buffer a loss of federal funding, with Hawaii expected to cover more costs of disaster mitigation. “Get ready to give us the input because this is when we say it’s historic, it is a new thing,” he said.

While the fee is relatively low, it does have a ripple effect on tourist spending and Hawaii’s economy. The hotel industry opposed the measure, but is focusing on the long-term positive impacts for the greater good.

Highest Taxes

The 11% TAT, combined with each county’s 3% lodging tax and a 4.7% general excise tax, puts a Hawaii visitor’s tax bill to nearly 19%, among the highest in the nation.

“It’s important so people see that where we have shoreline erosion near hotels, we are able to protect these incredible assets; where we have people being displaced, we are able to help them,” Green said on Tuesday.

“Where we see sea level rise coming up, we can adapt and we can actually have these resources from the hard monies and also likely bonds from these dollars to help us go forward with large projects as the Legislature sees fit, as the people across our state express need,” he said.

Hawaiʻi Hotel Alliance spokesperson Kekoa McClellan added that while any increase to the TAT will impact hotels, ultimately, because it is going to preserve natural resources that attract tourists, it’s a good thing.

“This direct investment in sustainable tourism, in sand replenishment and renourishment in mitigating the impacts of climate change that are affecting our visitor industry is going to guarantee that we can have a thriving visitor economy,” McClellan said.