Last ditch effort afoot to quash proposed property tax hike for hotels

Hotel industry makes last ditch effort to block proposed tax increases

HONOLULU, Hawaii (HawaiiNewsNow) - Leaders from the hotel industry gathered on the lawn of the Royal Hawaiian Hotel on Tuesday in a last ditch bid to block an increase in their property taxes.

The City Council has scheduled a final vote on the issue Wednesday.

The hotel industry says they’re already being squeezed by an increase in the hotel room tax, tourists spending less and wages going up.

“This will have a dire effect on the economy of our city and county,” said hotel worker Bulla Eastman. “We got to remember that tourism is the golden goose. It’s not the myna bird. It’s the golden goose."

The hotel industry also says its shouldering the burden to pay for rail.

But Mayor Kirk Caldwell disagrees with that conclusion.

“They don’t write a check. None of the hotels in Waikiki or on this island are actually paying for rail,” said Caldwell.

Under the proposal before the City Council, hotels would pay $1 more ― to $13.90 ― for every $1,000 of land value.

Caldwell says the city needs to pay for increases in service. Without a hotel property tax increase, he said, there would be a $17 million budget shortfall.

He also says the tourism industry is still strong and charging resort fees that don’t go to residents.

"It's a lot of revenue that they are taking and sending back to the owner who for the most part are investment banks, hedge funds," he said.

But the hotel industry says it’s looking for a fifth vote on the council to kill the proposal.

“Now is not the time to raise property taxes, not just on the hotels but anyone especially, since you haven’t demonstrated that the budget can be trimmed and can be cut,” said Mufi Hannemann, President and CEO of the Hawaii Lodging and Tourism Association.

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