HONOLULU -- Major hotel chains, airlines and tourism
organizations rallied around a move by Hawaii's state government to
increase the hotel room tax in return for more than doubling
tourism promotion dollars.
A statement signed by 46 tourism leaders, including heads of the
Hawaii Visitors & Convention Bureau and Hawaii Hotel
Association, supports an increase in the state's room tax from 6%
to 7%. In return, 3% of the total room tax -- at least $60 million
a year -- will be earmarked for tourism marketing.
Currently, the HVCB, a non-profit, private group under contract
to the state, gets $25 million in state funding. The provisions are
contained in Senate Bill 2201, which would also establish an
11-member tourism board to administer the funds.
The bill is part of a controversial package of state-sponsored
measures designed to kick start an economy that has undergone seven
years of economic slump. Other bills include an increase in the
state's 4% general excise tax (GET), levied at all levels of sales
and services, including all retail sales, and a lowering of state
income and corporate taxes.
The statement, presented as testimony in legislative hearings,
states: "While the visitor industry is not comfortable with the
idea of higher taxes that will add to the cost of a Hawaiian
vacation and reduce Hawaii's competitiveness, the visitor industry
is willing to support modest tax increases if it will lead to
dedicated funding at globally competitive levels."
The hotel association, in a position paper, said it "reluctantly
supports" the room tax increase, but "strongly supports" the
dedicated source of tourism promotion funding.
On rooms, guests currently pay the 6% hotel room tax, plus a
4.166% GET. Honolulu, the association noted, currently has the
nation's fourth-highest city taxes paid per room, and the highest
among resort areas.