HONOLULU — Visitors are spending more in Hawaii, but could that all change with a possible spike in hotel taxes?
According to the Hawaii Tourism Authority, visitor spending jumped more than 12% in March compared with the same month last year. Spending by tourists topped US$1.4 billion last month.
The number of tourists coming to Hawaii exceeded 800,000, a 2% increase compared to March 2016. Much of the increase is attributed to Japanese travellers, who are taking advantage of Hawaiian Airlines’ new direct flight from Tokyo to Kailuna-Kona.
But with a steep increase in hotel taxes on the horizon, the Aloha state may find that travellers will be tightening their pursestrings as a result.
Hawaii lawmakers are proposing an increase in hotel taxes to pay for Honolulu’s financially troubled rail transit project. Leaders in the House and Senate agreed to the last-minute proposal before a legislative deadline last Friday.
The bill would raise the transient accommodation tax paid by visitors from 9.25% to 12% for 10 years. Lawmakers expect the proposed hotel tax increase to raise $1.3 billion by 2027.
In a statement, Hawaii Tourism Authority President and CEO George Szigeti stressed the “need to be careful about increasing the cost for visitors to vacation in Hawaii and not price ourselves out of the global marketplace.”
Cost estimates for the rail project went from about $5 billion in 2014 to nearly $10 billion.
The bill goes next to the full House and Senate where it’s expected to win approval next week.
With file from The Associated Press