Municipalities Eyeing Hotel Tax Increases

Aloha Kakou:

Across the country, various municipalities are considering increasing taxes on visitors as their coffers run short.

Hotel room taxes run from 10.05% in Burbank, CA to 17.95% in New York City.

State legislators last year increased Hawaii's Transient Accommodations Tax (TAT) one percentage point as of July 1, 2009. A further one percentage point increase is scheduled for this July 1, making our total TAT 13.4166%.

Raising the TAT in Hawaii may be more of a negative impact here as most visitors are leisure, and they already have the idea that Hawaii is an expensive destination. Even thought the new tax only adds another $2 per night on a $200 a night room, just hearing that the tax rate is 13.4166% may be enough to make potential guests reconsider.

When I'm talking to our guests about our tax rate and they start to be upset, I ask them what the hotel tax rate is in their city. Most people are completely unaware of how visitors to their own town are taxed.

http://www.usatoday.com/travel/hotels/2010-04-05-1Ahoteltax05_ST_N.htm