Hawaiʻi has just cleared a groundbreaking piece of legislation — one that could redefine how destinations offset the environmental impact of tourism. The state legislature approved a so-called “green fee” which would raise additional revenue through visitor lodging and cruise taxes, with the aim of funding climate relief and infrastructure upgrades for at-risk coastal communities.

Here’s what this bill entails, why it matters — and what it suggests for destinations thinking about sustainable tourism.

What’s in the Bill?

• The legislation adds a 0.75 percentage point increase to the existing state tax on short-term lodging (hotel rooms, vacation rentals, timeshares).

• On top of that, cruise ship bills will incur a new 11 percent tax, prorated based on how many days the ship spends in Hawaiʻi ports.

• Taken together with existing taxes — including a 10.25 percent lodging tax (rising to 11 percent), county lodging taxes (3 percent), and a general excise tax (4.712 percent) — the total tax burden on travelers at check-out will reach about 18.712 percent.

• Officials estimate the new “green fee” will generate nearly USD 100 million annually, which will be directed to climate adaptation and resilience projects.

What the Funds Will Be Used For

The revenue from this tax increment is earmarked to help Hawaiʻi address the effects of climate change, strengthen infrastructure, and protect natural assets. Some proposed uses include:

• Beach replenishment — counteracting erosion along popular shorelines like Waikiki

• Strengthening buildings — providing hurricane clips for roofs and other structural reinforcements

• Vegetation management — removing invasive, flammable grasses that intensify fire risk

• Other shoreline protections, coastal defense, and disaster resilience measures

Why Hawaiʻi Took This Step

1. A First in the U.S.

To our knowledge, Hawaiʻi is the first U.S. state to adopt a visitor-tax specifically targeted to climate adaptation and resilience. That makes it a potential model (or experiment) for other regions facing environmental stress.

2. Aligning Tourism with Stewardship

Governor Josh Green frames the move as a generational commitment: since visitors come to Hawaiʻi for its natural beauty, it’s only fair that they contribute directly to preserving it.

3. Balancing Economic and Environmental Needs

Legislators pared back initial proposals in response to industry concerns. The idea was to find a balance between generating new revenue and not overburdening tourism—which is a major economic pillar for Hawaiʻi.

Still, some worry that higher costs may make Hawaiʻi less competitive against other destinations. As one hotel association leader asked, “Will we be taxing tourists out of wanting to come here?”

What It Means for Tourists & the Tourism Industry

For travelers, the increase might be modest on a per-night basis, but it adds up — especially on longer stays or cruise itineraries. Some may balk, while others may feel more comfortable knowing their contributions are directed toward preserving the very attractions they came to enjoy.

For hotels, resorts, and local operators, transparency will be key. If the state clearly demonstrates how the funds are used — e.g. “Your extra dollars helped rebuild this shoreline buffer” — it can build goodwill and legitimacy.

One visitor quoted in the report said: “If you really focus on the point — this is to save the climate … and that there’s an actual result … I think people could buy into it.”

Takeaways & Lessons for Other Destinations

• Revenue Link to Environmental Action

  Hawaiʻi’s model shows one way to tie visitor revenue directly to climate adaptation efforts rather than general budgeting.

• Incremental vs. Radical

  The bill’s modest 0.75% increase suggests that small increments may be more politically viable and less disruptive than sweeping tax hikes.

• Need for Accountability

  Success hinges on publicly showing measurable impact — e.g. coastal restoration, improved storm resilience — to preserve trust.

• Tourism Meets Responsibility

  Many destinations face rising costs to defend infrastructure and ecosystems. This kind of policy may become more common in regions where tourism intersects with climate vulnerability.

Source: The Guardian – “Hawaii passes ‘green fee’ for tourists to help fund climate relief” (May 5, 2025)

---

Disclaimer: This blog is intended for educational and informational purposes only. While we strive to share helpful insights, real estate laws, market conditions, and regulations may change. For the most accurate and up-to-date information, please contact a licensed real estate professional or your agent directly to understand how this may apply to your specific situation.