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Saturday, August 7, 2021
From "E komo mai" to "Stay away"?
By Keli'i Akina PhD @ 5:45 PM :: 1497 Views :: Taxes, Tourism

From "E komo mai" to "Stay away"?

by Keli'i Akina, Ph.D., President / CEO Grassroot Institute 

Hawaii is more than happy to tax the golden goose of tourism. But when it comes to feeding, caring for and cleaning up after it, we can’t seem to get on the same page.

Last week, the Hawaii Tourism Authority announced a plan to decrease tourism on Oahu. Yes, the agency originally tasked with promoting tourism to the islands is now suddenly waving a “Stay away” sign.

How its new goal will be accomplished is not entirely clear, especially as the agency’s enforcement powers are limited. But there is discussion of a tourism cap, as well as managing the visitors’ use of cars, limiting the number of visitor accommodations and making changes to land use and zoning laws.

The agency and its supporters are calling its new mission “destination management.” But this only leads to bigger questions about what Hawaii’s residents really want when it comes to the future of tourism. 

HTA’s current management is making the big assumption that Hawaii residents want less tourism. They are equating concerns about overcrowding and environmental impact with a desire for fewer tourists. That certainly reflects the complaints you sometimes hear. But where is the data? 

Who feels that way and what is their investment in the community and local economy? How is the current mood affected by lingering concerns about the pandemic and lockdown? What will happen to our economy — especially different sectors of the visitor industry — if HTA’s plan is successful? Is there any data that supports HTA’s vision of Hawaii’s tourism future as realistic and economically sustainable?

This new “tourism reduction” plan also gives lie to the notion that the HTA exists to support the visitor industry. Clearly, it exists to support only some sectors of the industry. Others, like the vacation rentals that will be targeted in the effort to reduce tourism, are in the strange position of funding the source of their own demise. 

This is one of the reasons that the Grassroot Institute of Hawaii supports defunding the HTA. The government should not be in a position to choose winners and losers among local businesses. That should be a function of the market, not a decision made by bureaucrats.

Let’s not forget that at the same time that the HTA is trying to suppress tourism, the counties are looking to benefit from it. With the passage of the law allowing counties to levy a transient accommodations tax of up to 3% (on top of the existing 10.25% state TAT), there has been a rush to enact county TATs. 

On Oahu, the Honolulu Authority for Rapid Transportation — desperate for cash to fund its over-budget and behind-schedule rail megaproject — has even tried to stake a claim to a share of the county TAT, guaranteeing that tourism dollars will remain vital to the county budget.

So where does that leave us? 

>> We have hikes on tourism taxes that make the government ever-more-reliant on the visitor industry and its revenues.

>> We have a “destination management” agency that receives taxpayer dollars to come up with plans to inhibit tourism. Though intended to represent the stakeholders in the tourism industry, the HTA seems to pick and choose whose interests it truly represents. 

>> And we have a state that is still recovering from the pandemic and lockdown, where the visitor industry is recovering faster than expected, but the jobs and economy are still lagging behind.

Perhaps it’s time to reevaluate what the future of tourism in Hawaii should be and what the proper place of government is in shaping it. The Legislature took a first step in cutting off HTA’s TAT funding, to make it more accountable to the taxpayers. Now, we need to determine if there is a better way to manage the promotion — and effects — of our visitor industry.

Let us not forget that the current haphazard approach to “destination management” could have disastrous long-term effects on an industry that functions as our state’s economic engine. The government has been prodding, poking and changing the diet of the goose that lays golden eggs. Continuing down this path could end up killing it, or make it very ill. 

That’s why we must work together on a coherent tourism policy that looks to the future and relies on solid data, one in which the private sector and the government can each play their respective roles.

E hana kākou! (Let's work together!)

 

 

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