Hawaii Legislature Approves Accommodations Tax Hike

Maui Beachfront Hotels and ResortsThe Hawaii legislature recently voted to override Gov. Linda Lingle's veto of a hotel room tax raise. The governor believed the tax increase would only worsen the drop in visitor arrivals and job losses in the tourism industry. As I blogged in early April, Hawaii reported 132 cancellations of meetings and incentive trips so far this year and next.

The state's transient accommodations tax will now go up one percentage point, from 7.25 percent to 8.25 percent, starting July 1. It will then add an additional percentage point in July 2010, resulting in a total occupancy tax of 9.25 percent.

Not surprisingly, members of Hawaii's hotel industry protested the tax.

"I just could not believe that one of the places they were looking to take money was to go after the visitor industry, especially how committed the visitor industry has been to Hawaii," Henry Perez, an executive with Aqua Hotels and Resorts, told Honolulu's KHNLHD 8. "I think they looked at one area. Let's just pass it on to somebody who doesn't live in this state, let them pay for it, but they don't realize that it's affecting the people who live in this state."

According to the latest survey by Hospitality Advisors LLC, Hawaii hotel occupancy was at a two-decade low in March. Statewide occupancy was at 66.9 percent, about 11 percent lower than the same time a year ago.
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