Hawaii Considers a New Fee for Vacationers

In response to the Lahaina wildfires, the Aloha State is the latest hot spot to propose a conservation-related tourist tax

By Allison Pohle of The Wall Street Journal. Excerpts:

"Vacation destinations worldwide are re-evaluating the role tourists play in their communities and the toll overtourism takes on limited natural resources, with some installing new fees for visitors. Hawaii, which hosted more than 9.5 million last year, is the latest to consider a tourist fee that leaders say will pay to protect beaches and prevent wildfires.

The proposed $25 flat fee—which would be collected when visitors check into a hotel or short-term rental—is working its way through the statehouse and could be approved this spring."

"Greece and New Zealand are among destinations that now charge tourists a so-called climate tax, which can range from just over $1 to $100. This month, Bali started charging all foreign tourists a $10 fee to promote more sustainable tourism. This spring, Venice will charge a day rate to combat overtourism and cap day-trippers."

"The current climate-fee measure doesn’t raise taxes or fees on Hawaii residents, and places some responsibility for the natural resources on visitors and would increase awareness for the effects of climate change, Green has said [Hawaii’s governor Josh Green]. He projects the fee will bring in $68 million annually. Green said the money will go to establish a state fire marshal, install fire breaks to protect vulnerable communities and help with disaster prevention. 

Green also proposed that half of the fee revenue go toward disaster insurance. Without it, he said, high-risk areas will have trouble rebuilding and attracting investors."

This policy brings up issues like scarcity, Tragedy of the Commons and the Two-part tariff. These are explained in the related post listed below.

If a good is scarce (like enjoying Hawaii), there won't be enough to go around if it is free (no entry charge). If it is a common resource, it gets overused if no one owns it (like the public spaces people will be in when they come to Hawaii).

With the Two-part tariff, one example is "amusement parks where there are admission fees and also per-ride fees." If the park is a monopoly, they can charge a low price for each ride but charge a large admission fee to make their money back (and this can actually lead to higher profit than charging the normal monopoly price).

If Hawaii is like an amusement park, then you pay to get in and still have to pay, say, for going to visit The U.S.S. Arizona. Hawaii is a monopoly in the sense that there is nowhere quite like it and it is a group of islands and there are no other major attractions nearby. So this fee could lead to more revenue for Hawaii in the long run.

Related post:

Overrun by Tourists, Venice Plans Entry Fee for Day Trippers (2023)