Honolulu implements new hotel tax

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Honolulu is introducing a new hotel tax that will add an additional 3% surcharge to all hotel and short-term accommodation bookings, including Airbnb stays. A similar measure is already in place in Kaua'i, Maui, and Hawai'i counties.

The new 3% tax will be collected from guests staying in hotels and short-term rentals in O'ahu, the Associated Press reports. It comes after Hawaiian officials passed a bill in July that removes some funding for the Hawaii Tourism Authority and changes how the state collects tax revenue from different counties.

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A Waikiki Trolley stops on Kalakaua Ave — Revenue collected from the hotel tax will be used to improve local services and infrastructure © Osugi/Shutterstock

Before the new law was introduced, the state collected a 10% hotel tax and allocated a share to each county based on the size of its population. Now, counties will be paid based on tourists per capita, and they can use the revenue from the additional 3% hotel tax to improve local services and infrastructure for both locals and visitors.

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According to the Honolulu Star-Advertiser, the county will allocate 33% of the revenue to developing a rail service in Honolulu, and about 8% will go to a special fund for natural resources impacted by tourism such as national parks and beaches. The remainder will go to the county's general fund.

Honolulu's mayor Rick Blangiardi signed the new tax bill on Tuesday and it will be implemented on January 1, 2022.

Kaua'i, Hawai'i, and Maui counties introduced a similar hotel tax in recent months, just as Hawaii as a whole struggled to cope with an influx of tourists this summer after restrictions were lifted. The surge of visitor numbers, coupled with reduced resources due to the pandemic, led to issues like traffic congestion, more garbage and lack of transportation resources.

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