Two major storms, a historic hotel-worker strike, floods, and active lava flows – through all that happened in Hawai‘i’s tempestuous 2018, one thing held fast: Hotels thrived. According to a hotel performance report released Friday by the Hawai‘i Tourism Authority, annual revenue for Hawai‘i’s hotels increased from 2017 to 2018 by 4.6 percent, to a total of $4.36 billion last year. Hotels in Maui County saw a total revenue gain of 8.2 percent, from $1.25 billion in 2017 to $1.35 billion in 2018.
Despite a slight (0.7-percent) decrease in Maui’s hotel room demand from 2017 to 2018, revenue rose due to increases in average daily hotel rates and revenue per available hotel room, the report stated. Among competitive “sun and sea destinations” examined by the report in 2018, Maui County ranked third in revenue per available room and average daily rate, behind the Maldives and French Polynesia. In spite of the slight decrease in hotel occupancy, O‘ahu, Kaua‘i, and Maui ranked in the top three competitive sun and sea destinations when it came to occupancy percentage.
That is all to say what you already knew: Maui no ka ‘oi. We can be battered by storms and tempered by fire, and still come out on the top of worldwide tourist destination rankings.
But while hotels continue to see revenue gains, the story looks different for locals.
Last year, it took hotel workers at Sheraton Maui, and other Kyo-ya-owned hotels across the state, 51 days on the picket line – on strike and without pay in the months leading into the holidays – before settling on a contract that ensured better pay and working conditions. Data compiled in December by the Hawai‘i Department of Business, Economic Development, and Tourism revealed that the median household income for the highest earning census tract on Maui has increased while the median household income in Maui’s lowest earning tract has decreased, deepening income inequality between areas. And the Realtors Association of Maui reported that the median price of a home on Maui in 2018 was $710,000.
These are signs of the all-too-familiar struggle for working locals, and given the toll the tourism industry has on our way of life – from crowded beaches and parks, to increased traffic, infrastructure pressure, and ecological stress – the question remains: Is the prosperous hotel industry paying its fair share?
In his State of the State Address, Governor David Ige said that he would ask the legislature to remove the cap on the transient accommodations tax and allocate a straight percentage of TAT funds collected to the counties. The TAT revenue would include “monies earmarked to maintain our state parks, trails, beaches and waters to the benefit of both residents and visitors,” he added.
That’s a start, and his bills, HB198 and SB1209 would help to inject more money into the county that could be used for the public’s benefit. Other proposals that are still alive in the State Legislature include HB1173 and its companion SB198, which would allow counties to further stick the bill to tourists with an additional surcharge tacked onto the TAT.
At the county level, an oft-debated topic is the fact that Maui County has the lowest hotel and resort real property tax rate of any county in Hawai‘i. Real property tax revenue represents the most significant form of income for the county, and raising the tax rate on the growing hotel industry could be an effective way to offset the cost of services, affordable housing, and environmental protection – while placing more responsibility on the corporations that commodify Hawai‘i.
Many politicians campaigned last year proclaiming the need for environmental protection, affordable housing, social services, and providing opportunities for the youth – and yes, these things cost money. With Maui’s fiscal year 2020 budget sessions just months away, time will tell if the council puts its (our) money where their mouth is. And if anyone says cash is the problem, I have a clue where they can find it.