Higher hotel taxes could mean fewer visitors - Hawaii News Now - KGMB and KHNL

Higher hotel taxes could mean fewer visitors

Aileen Seligson Aileen Seligson
Robert Berthiaume Robert Berthiaume
David Carey III David Carey III
Harry Rockey Harry Rockey

By Paul Drewes - bio | email

WAIKIKI (KHNL) - An effort to balance the state budget could keep visitors from heading to Hawaii. A small change in Hawaii's room tax will make big waves, not only in Waikiki, but across the state - with the island's tourism industry.

Another beautiful day in the islands brings thousands to our shores. And many to the state for an exotic tropical vacation.

But the price of paradise will be going up in July as the hotel room tax rises one percent this year. Next summer it will go up another percent. That will tack on another $4 for a $200 hotel room.

Many visitors say while its only a couple of bucks more a night, that is money they won't be spending on activities or shopping while they're here.

"It will affect the tourist industry very much and also retail stores and shopping," said Aileen Seligson, a visitor from California.

"I'm a little better off than other people so a few bucks is not a big deal but to other people it is," said Robert Berthiaume, a visitor from Minnesota.

Its also a big deal to Hawaii's struggling hotel industry.

Which has been hit hard from cancelled conventions to the state, the recession, and now swine flu concerns, some feel this latest increase could drive visitors away.

"Today, its brutally price competitive on an international scale and people are looking at every dollar. The only way people are traveling is with deals," said David Carey III, with Outrigger Enterprises.

Most hotels have already reduced rates and any additional increase could keep price conscious visitors from coming.

"Every additional cost to lodging is going to subtract from our desire to visit," said Harry Rockey, from California.

Because many travelers are basing their vacation on price, Hawaii hotels are facing competition not only from each other, but from other destinations.

And in this competitive market, some could be forced to absorb the additional room tax, which may mean cuts in employees or services.

"We have to cover that revenue loss somehow and that usually means cut backs. We're trying not to do that - but we have to stay in business," added Carey.

Hotels know they will have to absorb the cost for many rooms already booked. And are bracing for the impact of this law which takes effect July 1st.

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