Hawaii has introduced the United States’ first climate-resilience tax on visitors, with Governor Josh Green signing legislation that increases levies on hotel stays and cruise ship visits.
The move is aimed at generating nearly $100m annually to tackle the escalating effects of climate change, including beach erosion, wildfires and extreme weather.
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The decision follows the devastating 2023 Lahaina wildfire, which killed 102 people and destroyed much of the historic Maui town.
The new law, scheduled to take effect on 1 January 2026 for cruise ships and 1 January 2025 for hotels, is intended to support environmental protection and disaster prevention across the islands.
New tax framework to target tourism-related emissions and risk
The legislation raises the transient accommodations tax (TAT) by 0.75%, bringing the rate on hotel and vacation rental stays to 11%. When combined with state and local levies, the total tax burden on visitors staying overnight will approach 19% — one of the highest rates nationally.
A separate 11% tax will apply to cruise ship passengers, proportionate to the number of days spent in Hawaiian ports.
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By GlobalDataOfficials have framed the change as a necessary adjustment to ensure tourism contributes to safeguarding the very ecosystems and infrastructure it relies upon.
The tax revenue will be allocated to projects such as beach restoration, invasive species removal, and infrastructure fortification against hurricanes and wildfires.
Funding climate adaptation and wildfire prevention
Much of the funding will be directed at climate adaptation initiatives. These include replenishing sand at popular tourist beaches like Waikiki, implementing firebreaks to reduce wildfire spread, and securing rooftops with hurricane clips.
A new state fire marshal position, created in the aftermath of the Lahaina tragedy, is expected to be filled within two months.
Governor Green described the tax as a “forward-thinking mechanism” and stressed the importance of preparing Hawaii for future climate events. He called on other states and countries to develop similar funding tools to manage the increasing costs of climate disasters.
Balancing environmental protection and tourism sustainability
While the tax increase has prompted concern over rising travel costs, industry representatives have expressed conditional support.
Hawaii’s hotel sector, initially hesitant, ultimately backed the bill, noting the importance of preserving the state’s natural beauty for long-term tourism sustainability.
Revenue from the new levy will flow into Hawaii’s general fund, with lawmakers and the governor tasked with proposing and approving spending for environmental priorities. These include protecting native species, managing tourist impact, and enhancing resilience to climate-related events.
State Representative Adrian Tam, chair of the House tourism committee, said transparency in how the funds are used will be crucial.
“The visitor industry will struggle if we do not take action now,” Tam said, warning that failing to invest in environmental protection risks undermining Hawaii’s global image and its economic reliance on tourism.
