Home to hundreds of beautiful islands and endangered wildlife species, Hawaii is lovingly known as the Aloha State. It is a globally popular tourist destination, attracting millions of tourists each year.
According to the Department of Business, Economic Development, and Tourism’s (DBEDT) annual visitor research report, more than 9.7 million people visited the Hawaiian Islands in 2024.
The Cost of Paradise
Unsurprisingly, tourism makes up a significant portion of Hawaii’s economy. In 2020, it accounted for about 17% of the state’s GDP. However, its environmental footprint cannot be overlooked. The large volume of visitors to the state places significant stress on its fragile land and marine ecosystems and generates a substantial amount of waste and pollution, which puts a strain on the state’s natural resources.
Since human activities exacerbate the climate crisis, Hawaii’s reliance on tourism increases its vulnerability to natural disasters and extreme weather events, which are often intensified and made more frequent by climate change. In 2023, the deadly wildfires that swept across West Maui resulted in the state discouraging tourism for two months, costing the island an estimated $4-6 billion.
A Tax for a Greener Future
To mitigate these issues while supporting the state’s economy, Hawaii has introduced a new Green Tax. Earlier this year, Governor Josh Green announced that the bill will be rolled out in 2026. Under this policy, 0.75% will be added to existing accommodation taxes, raising the rate from 10.25% to 11%. These levies will also apply to cruise ships that port in Hawaii.
The Green Tax is projected to generate $100 million annually, with the funds raised from this bill allocated towards various initiatives. Some of these include projects focusing on environmental stewardship, hazard mitigation, infrastructure resilience, and sustainable tourism.
Who’s in Charge of Hawaii’s Green Tax funds?
The allocation of funds will be overseen by the Green Fee Advisory Council, consisting of various leaders and experts. Many of the Council members have valuable experience in sustainable community development and environmental management. Their expertise is expected to ensure a more equitable and responsible use of funds to maximise the effectiveness of the Green Tax.
Balancing Business and the Environment
News of the Green Tax bill brought about mixed reactions. There were concerns that businesses would be affected by the increased visitor taxes, particularly within the cruise industry, which will face such levies for the very first time.
Still, industry stakeholders had expressed their support for the bill, highlighting its role in balancing the maintenance of the state’s natural resources.
For many businesses, the Green Tax presents both a challenge and an opportunity. According to Booking.com’s 2024 Sustainable Travel Report, 34% of travellers feel that making sustainable choices feels ineffective when the travel destinations themselves lack visible sustainability practices. Budget-conscious visitors would also be more hesitant to visit Hawaii due to the increased costs.
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Rethinking the Future of Tourism
Some argue that the fee may change tourism demographics, potentially attracting more mindful and sustainably responsible visitors who are better aligned with Hawaii’s sustainability goals.
Encouragingly, the Booking report indicated that 75% of global travellers expressed a desire to travel more sustainably in the coming year.
Similar policies and bills have also been implemented in other popular tourist destinations, including the Maldives, New Zealand, Greece, and Indonesia. Visitors have shared that they would be willing to pay more as long as they are kept well-informed about how those extra expenses would contribute to the destination’s conservation efforts. If both governments and travellers make a collective effort to be transparent and accountable, tourism can move towards a mutually beneficial structure.
Considering Hawaii’s heavy reliance on the tourism industry for income, implementing this Green Tax may seem counterintuitive at first. However, in the long run, having this bill in place will strengthen the industry by investing in the protection of Hawaii’s natural resources amid worsening climate conditions.
The state’s prioritisation of resilience over short-term gains is a bold but thoughtful move that underscores the importance of incorporating sustainability into economic policies.
Editor’s Note: The opinions expressed here by the authors are their own, not those of Impakter.com — In the Cover Photo: Surfers riding waves Cover Photo Credit: Jess Loiterton
