HONOLULU – When planning a vacation, you're likely preparing to spend quite a bit of money on lodging, travel and restaurants. You may also incur hidden costs simply based on the destination, which can unknowingly drive up your vacation budget.
Honolulu has been found to charge the highest tourist tax to visitors, according to a recent report by UK-based financial firm Money.co.uk.
The firm calculated that if the average cost of a hotel room in Honolulu is $390, then that's an additional $51.70 a night – or more than $361 a week – for travelers . Behind Honolulu for the most expensive tourist taxes are San Francisco and Los Angeles, with a tax of $29.61 and $23.39 a night, respectively.
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Honolulu currently has a 3% hotel tax surcharge on top of the state's 10.25% transient accommodations tax (TAT), a tax that dates back to the ’90s and is charged on gross proceeds from hotels, vacation rentals, timeshares and other types of lodging that someone stays in for less than 180 days in exchange for payment of some sort. Typically, the traveler ends up paying this additional fee on their accommodations bill.
What is a tourist tax?
T. Ilihia Gionson, Hawaii Tourism Authority's Public Affairs Officer, defines a tourist tax as "the visitor's opportunity to contribute toward the kinds of public services and amenities that residents and visitors both utilize."
The tax can come in various forms, like the TAT in Hawaii, or, for example, Mexico charges a flat rate fee of 224 pesos, or – about $11.30 – to tourists entering the country.
"In a time where everything has a rising cost, the burden of tourism management should be shared with the visitor," he added.
In Hawaii, the revenue helps pay fservices like lifeguards and hiking trail maintenance.
"These are all the things everybody enjoys while in Hawaii," Gionson said. Over the past decade, the Hawaii Tourism Authority has reinvested nearly $40 million in those visitor dollars back into natural resources, Hawaiian culture and the community, he said.
"There is something I think that is special about Hawaii’s natural climate and its culture," said Rep. Aaron Ling Johanson, Chair of the Hawaii State Legislature House Committee on Consumer Protection & Commerce and co-sponsor of the surcharge. A trip to Hawaii is "essentially paying for a premium product," especially given that resources are finite and should be stewarded appropriately.
He said the surcharge is meant to attract better visitors to Hawaii who are interested in ecotourism or cultural experiences, or as he put it, "quality over quantity."
Honolulu was the last county in the state to implement the surcharge in December after the Legislature ended sharing a portion of the state tax with the counties.
Honolulu officials said the surcharge could bring in an additional $86 million to the city.
How does a tourist tax affect your trip?
If you overlook the tourist tax, your trip may end up going over budget. Think of a $100 hotel room now costing at least $113.25 (maybe even more with other additional fees, like a cleaning fee).
On the other hand, tourists can feel like they're contributing toward conserving Hawaii's natural resources, cultural preservation initiatives, and community efforts, said Gionson, especially at a time when over tourism in Hawaii is on people's minds.
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How can you manage the tourist tax on your trip to Hawaii?
With smart planning and careful consideration, you can still stay under your travel budget when visiting the islands.
For starters, do your research beforehand and factor in the additional cost when booking your stay to factor in the additional cost. You can also consider booking your hotel through the Malama Hawaii Program, where you could qualify for a free night or discounted stays at certain hotel properties in exchange for volunteering, such as helping out in a beach clean-up event.
See where you can cut other costs in your trip, such as forgoing the rental car in favor of the public bus or rideshare service.
Eating and shopping local not only benefits the community but is often cheaper for visitors, especially if you're venturing away from tourist hotspots like Waikiki or Lahaina. Another option to reduce eating out is stopping by a farmer's market to pick up fresh local produce for breakfast some days.
Thankfully, the beach is also always free to all.
This article originally appeared on USA TODAY: Honolulu charges the highest tourist tax: How it affects your trip