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Friday, June 14, 2024
$11.3B Loss: Elimination of TVRs Would Drive Hawaii into Economic Depression
By News Release @ 3:01 PM :: 1973 Views :: Maui County, Economy, Small Business, Tourism

Travel Tech Releases New Economic Analysis on Costs of Phasing Out Legal Short-Term Rentals on Maui

Study shows short-term rentals generated $2.2 billion in economic activity for Maui and $11.3 billion across Hawaii in 2023

News Release from Travel Technology Association, June 14, 2024

KAHULUI – Today, the Travel Technology Association and Hawaii economic consultant Kloninger & Sims released a study on the economic and fiscal impacts of the short-term rental market in Maui County and across the state.

According to the report, under Mayor Richard Bissen’s proposal to phase out approximately 7,000 short-term rentals on the Minatoya list, Maui County could lose up to $91.8 million in annual tax revenue and up to $280.9 million in total tax losses if all short-term rentals are discontinued in the county. If other counties followed suit and phased out short-term rentals, the State could lose as much as $554 million in annual tax revenue.

The study also underscores the significant economic activity short-term rentals contribute to Maui and Hawaii yearly. The analysis found that short-term rental guests in Maui County directly spent $2.2 billion in 2023, resulting in $4 billion in economic activity. Across Hawaii, short-term rentals generated $11.3 billion in economic activity in 2023 and 66,000 jobs.

Key Findings:

If all short-term rental units on the Minatoya List are phased out, Maui County could incur the following annual economic and fiscal losses:

  • $53.3 to $91.8 million in real property (RPT), transient accommodations (TAT), and general excise tax (GET) to Maui County
  • $1.3 billion in economic output
  • 7,800 jobs

If all short-term rental units in Maui County are phased out, the following annual economic and fiscal losses  could occur:

  • $128.3 to $280.9 million in RPT, TAT and GET to Maui County
  • $2.2 billion in economic output
  • 23,000 jobs

If all short-term rental units throughout the state are phased out by the counties, the following annual economic and fiscal losses could occur:

  • $803.3 to $955.9 million in taxes to the State and Counties, that includes:
  • $554 million in State TAT and GET
  • $121 million in all county GET and TAT surcharges 
  • $128.3 to $280.9 in Maui RPT
  • $11.3 billion in economic output
  • 66,000 jobs

“Roughly a third of all visitors to Hawaii use short-term rentals. On Maui, that ratio is even higher,” said Erik Kloninger, economist and partner of Kloninger & Sims. “Reducing the number of short-term rentals would limit accommodation options and likely lead to a decrease in visitors, resulting in job losses across various sectors of the economy and a significant shortfall in tax revenue for Maui County and the State.”

“Short-term vacation rentals have been a staple of the Maui economy for decades,” said Laura Chadwick, President and CEO of Travel Tech. “They’ve opened the island’s beauty to countless visitors and provided jobs and tax revenue to support the local community.  We hope Maui and Hawaii leaders will consider other options to balance the economic benefits of short-term rentals and housing needs of the community.”

PDF: Read the Study


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