Hawai‘i hotels are already some of the most expensive in the nation. A quick search reveals mid-tier brands like Courtyard by Marriott regularly topping $250 a night. But that’s just the starting price—once you arrive, the real sticker shock begins.
Add in $50 a night for parking. A $60 daily resort fee, whether you use the pool or not (and no, that “destination fee” isn’t optional). Then there’s the pile-on of existing taxes, service charges, and mysterious surcharges that turn an affordable getaway into a luxury expense.
Now, the State of Hawai‘i has introduced something new: an additional 11% tax on hotels and short-term rentals, with the revenue earmarked for climate resilience and environmental preservation. Too much? Maybe. But that’s not your decision to make. In modern Hawai‘i, affordability isn’t guided by public opinion or viral TikToks lamenting the cost of paradise—it’s defined by who’s still willing and able to pay.
My list and reviews of the best luxury hotels on O’ahu.
A Climate-Driven Justification or a Barrier to Entry?
The new 11% hotel tax—passed by Hawai‘i lawmakers in May 2025—is being framed as a necessary response to the state’s escalating climate crisis. Sea-level rise, coral bleaching, and infrastructure erosion are no longer abstract threats. In some areas, the shoreline is literally disappearing. Supporters of the bill, including Governor Josh Green, argue that if tourists contribute to environmental wear, they should also help fund the solution.
“The climate crisis is here, and Hawai‘i is on the front lines,” said Rep. Sean Quinlan, one of the bill’s key backers. “Our tourism economy must start paying for its impact.”
The new tax applies to all hotels and short-term rentals statewide and is in addition to the existing transient accommodations tax (TAT), which already includes both a 10.25% state portion and a variable county add-on (up to 3%). That means some visitors could now be facing combined lodging tax rates nearing—or even exceeding—17% in certain counties.
Supporters say the tax will generate over $400 million annually, with funds earmarked for coastal preservation, wildfire prevention, and climate resilience efforts like seawall reinforcement and managed retreat planning. The rationale? If the tourism economy is Hawai‘i’s lifeblood, it also bears the responsibility to protect the land it profits from.
Go Full Research Mode Here
Hawai‘i Department of Taxation – Transient Accommodations Tax (TAT) Overview
This page provides comprehensive information on the TAT, including current rates, applicable accommodations, and filing requirements.
https://tax.hawaii.gov/forms/a1_b2_2tat/
Hawai‘i Department of Taxation – TAT Brochure (PDF)
This brochure offers a detailed explanation of the TAT, its application, and examples to assist taxpayers in understanding their obligations.
https://files.hawaii.gov/tax/legal/brochures/TAT_brochure-23.pdf
Hawai‘i State Legislature – Senate Bill 1396 (SB1396)
This bill outlines the recent legislative changes increasing the TAT rate from 9.25% to 11%, effective January 2026, to fund climate change mitigation efforts.
https://data.capitol.hawaii.gov/sessions/session2025/Bills/SB1396_CD1_.pdf
A Trust Deficit: Can Hawai‘i’s Government Be Trusted with More Tourist Dollars?
If Hawai‘i’s leadership hopes to justify a double-digit hotel tax in the name of environmental stewardship, it must also confront a pressing question: Can the state be trusted to spend the money wisely?
The record isn’t reassuring.
From stalled infrastructure upgrades to ballooning budgets, Hawai‘i has earned a reputation for costly missteps and drawn-out project timelines. Residents and visitors alike have watched projects such as the long-delayed Honolulu rail system bleed billions past projections—without delivering its promised functionality. And year after year, travelers landing at Honolulu’s Daniel K. Inouye International Airport are greeted not by world-class efficiency, but by subpar terminals, dated interiors, and low satisfaction ratings.
According to the 2024 J.D. Power North America Airport Satisfaction Study, Honolulu ranks near the bottom of all large airports in the U.S.—a repeat performance that reflects long-standing neglect rather than one-off turbulence. In a destination that prides itself on hospitality, the arrival experience is far from luxurious.
So when lawmakers promise that the new tax will fund climate adaptation and sustainable infrastructure, the natural response is skepticism. Where has the money gone before? How much of the $400 million expected annually from this new surcharge will make it to coral reef restoration, wildfire mitigation, or sea wall development—and how much will get lost in bureaucracy and bloated contracts?
Until state agencies demonstrate fiscal discipline and transparent reporting, calls for more tourist contributions will feel less like stewardship and more like extraction. In the meantime, both residents and visitors are left wondering: Will this be another pile of cash thrown into a broken system?
Redefining Paradise: Who Gets to Come to Hawai‘i Now?
With nightly hotel rates soaring, hidden fees stacking up, and now an 11% state-level tax layered on top, the message is becoming clear—even if it’s not officially stated: Hawai‘i is no longer trying to be a destination open to all.
Budget travelers, young couples, and families searching for that once-in-a-lifetime experience are increasingly priced out, often blindsided by the final total at checkout. Social media feeds are filled with sticker shock, and threads on travel forums echo with the same refrain: “It’s beautiful, but not worth the cost anymore.”
I just updated my best budget hotels on O’ahu list and what do you know, they pricing is up 10-30% on several.
And while the state insists the tax is a necessary step toward climate resilience, it may also reinforce a growing perception that Hawai‘i is shifting toward luxury-first tourism, a model where exclusivity replaces accessibility. The islands may soon occupy the same psychological space as Monaco, Bora Bora, or the Amalfi Coast—places admired from afar, but visited only by the well-heeled.
This shift isn’t just about economics. It touches on identity. Hawai‘i has long balanced its appeal as a tropical paradise with its deep cultural roots and values of aloha, mālama (care), and community. But when the cost to visit climbs high enough that only a privileged few can afford to experience it, what kind of tourism culture is being preserved—and at whose expense?
For travelers, the impact is already showing. Some are shortening trips. Others are choosing alternative destinations like Mexico, Costa Rica, or Bali—places offering comparable beauty without the high price tag or the feeling of being nickel-and-dimed at every turn. And once a destination loses its reputation for value, it doesn’t come back easily.
So while Hawai‘i’s policymakers pursue a future rooted in climate resilience and reduced tourism volume, they must also grapple with the unintended reality: they may be preserving the islands—but not the spirit that once made them feel like they belonged to everyone.
People still go to Hawaii?
As a native of Miami I understand the difficult balance between welcoming as many tourists as possible with open arms and cursing your misfortune to have to deal with hordes of unruly and often rude tourists. I’m unsure to what degree Hawaii still relies on tourism as the golden goose but it’s tough to see a major price increase across the board in a positive fashion. I could completely understand charging such a tax on short term rentals as those directly make life worse for residents by driving up rent prices for locals but hotels are already very pricey and this won’t help. I suppose if Hawaii genuinely does have too many tourists then this is a prudent move. For my wife and I though, we head to Bali every year where there’s value to be had.
You forgot the Philippines as an alternative to Hawaii. You mention Bali but that way further away then the Philippines. Bali’s beaches are not as good as in the Philippines. Go to Boracay, El Nido, Coron, Bohol, Siargao or countless other parts of the Philippines.
Inexpensive, better natural environment then Hawaii, everyone speaks English and United will soon fly twice a day from San Francisco to Manila.