Honolulu Introduces New Hotel Tax

Honolulu is introducing a new hotel tax that increases all hotel bookings and short-term accommodation bookings, including Airbnb stays, by an additional 3% surcharge. A similar measure is already in place in the counties of Kaua’i, Maui and Hawaii.

Before the introduction of the new law, the state levied a hotel tax of 10% and divided each district with a share based on its population. Now counties are paid on a per capita tourist basis and can use the revenue from the additional 3% hotel tax to improve local services and infrastructure for both locals and visitors.

According to the Honolulu Star Advertiser, The county will use 33% of the proceeds to develop a rail transport system in Honolulu, and approximately 8% will go to a special fund for natural resources affected by tourism, such as national parks and beaches. The rest goes into the general fund of the district.

Honolulu Mayor Rick Blangiardi signed the new tax law on Tuesday, which will be implemented on January 1, 2022.

Kaua’i, Hawaii, and Maui counties have all rolled out a similar hotel tax in recent months, just as Hawaii as a whole struggled to cope with the influx of tourists this summer after restrictions were lifted. The increase in visitor numbers, coupled with reduced resources due to the pandemic, led to problems like traffic jams, more garbage and lack of transport.