(Bloomberg) — As Hawaii nears the second anniversary of the Maui fires — which scorched 17,000 acres of residential and commercial buildings, cultural landmarks and vegetation, causing $5.5 billion of damage — its government is turning to tourism to mitigate future climate-related disasters.
A new “green fee,” proposed by Gov. Josh Green and passed through the legislature on May 2, is now the first of its kind in the country. It aims to raise some $100 million each year by marginally hiking tourism levies from 10.25% to 11%, costing Hawaii’s 10 million annual tourists an average of $2 per day. And unlike most tourism taxes, which fund such infrastructure as roads and public transportation, the revenue raised through the green fee will go exclusively to environmental projects, be they beach and coral reef restoration efforts or the removal of fire-prone grasses.
The sum adds substantially to Hawaii’s annual budget for “green infrastructure,” which in 2021 amounted to 1 percent of the state’s economy. According to a recent assessment led by Jack Kittinger, senior vice president for Conservation International’s Center for Regenerative Economies, that leaves the state short about $560 million per year. “The deficit that we have in conservation financing is why our environmental quality continues to decline,” he says.
According to Green, it was the Maui fires that inspired the state Legislature to act. The governor had repeatedly proposed such legislation in prior years without success. “Those fires profoundly awakened our state to the reality that we have to have a mechanism to mitigate risk and prepare for future potential disasters,” Green says.
The bill goes into effect on Jan. 1, 2026. But it’s already adding to a conversation about sustainable tourism management that’s spreading across the U.S. and around the world. As part of President Donald Trump’s signature bill passed on July 4, national parks too will begin charging tourism fees — albeit only for foreign visitors — to fund conservation initiatives no longer covered by federal budgets. And in destinations as disparate as Venice and Bhutan, new rules either introduce or raise the cost of tourism taxes. The aim is to turn tourism spending into a tool for conservation, despite its own environmental cost.
“As time goes by,” Green says, “people will appreciate how well we’re able to maintain Hawaii’s beaches and natural wonders. We want to protect those for future generations.”
First on the agenda
Ten million tourists visit Hawaii each year, putting a tremendous burden on the state’s ecosystem: Trails and vegetation become more trampled, beaches become littered, and the influx of people puts a greater strain on water and sewage resources.
Even before the first green-fee tax bill is passed along to guests, Green is making a list of projects he’d like to tackle with the proceeds, such as securing roads threatened by ocean surge and fortifying crumbling bluffs. The investments aim to preserve tourism sites and quality of life for locals while also creating jobs, with legislators from each island weighing in on the priorities. If the projects succeed, the green fee could expand; if not, it may be scrapped within the year.
On Kauai’s Nepali coast, there’s already an example of small changes making big impacts. Parking was eliminated at a beach park that was once plagued by tourism impacts. By creating a remote lot with a pay-to-ride shuttle service, once-trampled areas such as taro patches began to regrow, and the initiative created local jobs and improved satisfaction for tourists and locals alike — serving as a model for broader statewide efforts.
As a sign of how serious Green is about addressing the state’s environmental problems, he’s phasing out the Hawaii Tourism Authority (HTA), the agency that, since 1998, has led policy and marketing efforts. Not long after the new green fee bill passed, Green asked for and received the resignation of the entire HTA board of directors. The HTA will be phased out, and in its place will be the Destination Stewardship Organization, a new nonprofit managing tourism with an emphasis on community values, sustainability and control, rather than treating it as a commodity.
Not everybody is on board
Some tourists are referring to the new levy as a “surf tax” due to the prominence of budget-conscious surfers on Hawaii’s legendary breaks. But the overwhelming consensus is that neither tourists nor hotels are truly sweating the increased fee.
“The visitor industry relies on Hawaii’s natural environment, and we aren’t doing enough to protect it,” says Carl Bonham, a professor of economics at the University of Hawaii. “This bill had significant support from the hotel industry, because the money is being reinvested in something that’s going to protect the tourism industry,” he adds.
But the fees could add to a landscape in which tourists increasingly feel nickel-and-dimed. Online message boards already show plenty of consumer frustration over untangling the fine print around the state’s many required permits, reservations and fees.
Malia Hill, director of policy for the Grassroot Institute of Hawaii, warns that all this could hurt the destination’s appeal and dampen visitor spending with restaurants and tour operators. “I don’t think enough thought was given to how it will affect the economy,” she says.
Green argues that locals won’t be affected on a large scale. “It’ll have a very, very minimal impact on local people,” he says. “When we had COVID, we had a period of time where we had $120 tests per person, and people still came in very large numbers.”
A model for other states?
There’s precedent for Hawaii’s green fee around the world — just not in the United States. Bhutan has long charged a “Sustainable Development Fee” of $65 per day — and continues to attract travelers after raising it to $200 in 2022. Palau’s $100 “Pristine Paradise Environmental Fee” has similarly funded its protected marine areas while maintaining steady tourism since 2018. The revenue from these fees in Bhutan and Palau also directly supports sustainability projects like tree planting, reef protection and national park upkeep.
In Bhutan and Palau, high fees keep mass tourism from taking root in delicate places that can draw fewer but high-paying travelers. But many more destinations have been upping their fees, or adding new ones, in recent years.
Venice, which in 2024 implemented a day-tripper tax of up to about $12 to address overtourism, is more like Hawaii in the size and scale of its tourism industry. A year into its program, there’s been no reported decline in visitor interest, while the fees are ensuring that local residents don’t bear the full cost of tourism; the revenue is helping to fund everything from waste management to cultural programs. And Greece has created a similar program too; in January 2024 the country introduced the Climate Crisis Resilience Fee to replace its old hotel tax system, which charges travelers up to 10€ per night. The Maldives, Bali, and even New Zealand have also passed legislation to introduce new climate-focused tourism levies in recent years.
Green believes that Hawaii’s new green fee will serve as an example for other states — though he’s less clear on what benchmarks the state must hit to prove that the new fee is making an impact. “I have had some interest from two or three governors,” he says. “It’s probably different for everyone, but I expect other places that have challenges with the climate, especially those with long shorelines or fire hazards, to do some version of this.”
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