Mike McCartney, president and CEO of the Hawaii Tourism Authority issued a statement Monday denouncing a proposed increase to the state's transient accommodation tax (TAT).
Currently, the proposal on the table called for the elimination of the current rate of 9.25 percent and implementation of a new 11.25 percent tax, representing two-percent hike beginning July 1.
"The Hawaii Tourism Authority (HTA) does not support any proposed increase to the transient accommodation tax (TAT) beyond the current 9.25 percent," said McCartney in a written statement. "An increase to the TAT would negatively affect Hawaii’s competitive position in the marketplace by putting an additional tax on our visitors. This could cause us to lose momentum in the significant gains in visitor arrivals and spending experienced over the past three years. We need to ensure the continued success of our industry for the state’s economy to be sustainable."
Accoridng to McCartney, Hawaii is a leisure destination, where the visitor’s spending is discretionary.
"As such, our visitor market is price-sensitive, and any increase could drive a traveler to a competing destination," he says. "An increase to the TAT will only diminish Hawaii’s ability to compete in a price-sensitive market."
Currently, the visitor industry supports more than 166,000 jobs and we anticipate this number to grow this year, according to McCartney.
"However, we are still well below the peak of more than 178,000 jobs in 2005, and the TAT increase could cause a loss of jobs in the tourism sector," he says.
According to data provided by McCartney, visitors contribute an average of $196 in per person per day spending, which adds up to roughly $1,800 per person per trip.
"Instead of increasing the TAT, we believe that by investing in opportunities to maintain market share and diversify our tourism profile in the leisure and meetings, conventions and incentive (MCI) markets to our established and emerging major market areas, we can generate greater revenue that will benefit the entire state," says McCartney. "We will also continue our efforts to maintain and expand airlift and neighbor island distribution, improve the cruise ship arrival program, build on the experiential assets of our people, place and culture, and support career development for our youth – all of which are an investment into the state."