Hawaii is taking a bold step to protect its stunning beaches, lush rainforests, and vibrant ecosystems by raising taxes on hotel stays and cruise ship visits. Signed into law by Governor Josh Green on May 27, 2025, the new measure will generate roughly $100 million a year to fight climate change effects like eroding shorelines, wildfires, and threats to native wildlife. Starting in 2026, visitors will see a slight bump in the state’s Transient Accommodations Tax (TAT) for lodging and a new tax on cruise bills. While the move aims to preserve Hawaii’s natural beauty, it’s stirring up conversations about how it might affect travelers’ wallets.
The law bumps up the TAT on hotels, vacation rentals, and timeshares from 10.25% to 11%, starting January 1, 2026. For a $400-a-night hotel room, that’s an extra $3 per night. A new 11% tax on cruise ship bills, based on days docked in Hawaiian ports, kicks in July 2026. For instance, a $1,200, 12-night cruise with three days in Hawaii will add about $33 to the tab. With existing county taxes at 3% and a 4.712% general excise tax, the total tax on accommodations could hit close to 19%, making Hawaii one of the pricier U.S. destinations. The funds will be split three ways: protecting natural resources, preparing for climate-driven disasters, and easing tourism’s strain on the environment.
Governor Green, a longtime advocate for Hawaii’s environment, didn’t mince words about the need for action. “We can’t keep up with these crises without bold steps,” he said, pointing to the devastating 2023 Lahaina wildfire, disappearing beaches, and struggling coral reefs. With over 10 million visitors flocking to Hawaii each year, the state faces a $560 million shortfall for environmental protection, according to a local conservation group. Green called the tax a “promise to future generations” to safeguard Hawaii’s landscapes and Native Hawaiian values, like mālama ‘āina—caring for the land that sustains us all.
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The tourism industry, which keeps Hawaii’s economy humming, has mixed feelings. John Pele, who leads a Maui lodging group, gets the need for conservation. “Nobody disagrees that this money will do good,” he said. But he’s worried about affordability, wondering if higher costs might make families think twice about visiting. The cruise industry is even more concerned, especially companies like Norwegian Cruise Line, which sails the Pride of America year-round in Hawaii. Industry reps argue the cruise tax could clash with U.S. laws on interstate commerce, hinting at possible lawsuits. For a week-long cruise, the tax could tack on up to $150 per person—a hefty hit for a family vacation.
This move puts Hawaii in line with places like Iceland, where similar taxes fund eco-friendly projects. In the islands, the money will go toward things like strengthening infrastructure against hurricanes, rebuilding Waikiki’s shrinking beaches, and clearing invasive plants that fueled the Lahaina fire. But some worry Hawaii might lose its edge as a must-visit destination, especially with places like Florida and Mexico also hiking tourism fees. Local businesses, which rely on the $18 billion tourism industry, are nervous that higher costs could mean fewer visitors.
People are split on the idea. Some cheer the “green fee” as a smart way to protect Hawaii’s beauty, while others grumble about paying more for their dream vacation. The cruise industry’s talk of legal challenges adds another layer of uncertainty, with debates over federal laws on shipping. If the tax holds up, it could inspire other states to follow suit, as Green suggested, stressing that climate threats demand creative solutions.
As 2026 approaches, the state will keep a close eye on how the tax plays out. The Hawaii Department of Defense, working with other agencies, will steer the funds toward projects that ensure the islands stay resilient. Still, questions linger: Will the tax deliver the environmental wins Hawaii needs without scaring off tourists? Governor Green has until July 9, 2025, to lock in the details, but his enthusiasm suggests it’s full speed ahead. For travelers planning a Hawaiian getaway, it’s time to budget for these new costs while the state works to protect the paradise that draws millions each year.
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