Tourism’s alternative accommodations deserve support
Rick Wall, left, is chief executive officer and Alan Mattson is president of Castle Resorts & Hotels, based in Hawaii with more than 600 employees.
Tourism is the largest industry in Hawaii, and it is paramount we support it.
This is particularly true for a new and growing sector of the industry — the alternative accommodations or vacation rental market.
Demand has grown as independent travelers increasingly seek a different experience beyond the traditional resort setting.
Platforms such as Airbnb, VRBO and Homeaway fill this very important niche in the market and complement the more traditional resorts, hotels and timeshares here in the islands.
These platforms, led by Airbnb, are committed to being responsible partners to the industry and our local community. They’re seeking approval from the Legislature to collect and remit general excise (GET) and transient accommodation taxes (TAT) on behalf of their hosts. In doing so, they would be able to ensure tax compliance and provide an estimated $15 million in annual revenue to the state.
We believe this would be a win-win. The state would receive badly needed funds while the tourism industry and broader community would be assured that platform users are paying their taxes and operating on a level playing field with hotel operators.
Similar tax programs have been adopted in cities across the country and even around the world.
Surprisingly, some have opposed this legislation. Much of their concern, however, seems to be based on an inaccurate understanding of the measure, House Bill 1850.
Here are some things that we believe are important to consider:
>> This measure would not pre-empt or usurp the authority of the counties to establish and enforce rules on vacation rentals.
In fact, counties could and should continue to have robust discussions on and adopt rules governing how and where vacation rentals should occur.
>> This measure would ensure compliance by allowing any platform to register as a tax broker, thereby making it responsible for hosts’ taxes.
Every single transaction would be automatically taxed. There simply would be little room for hosts to hide their income and even if they could, the platform would be responsible for that host’s tax burden.
In addition, the state Department of Taxation could administratively subpoena tax records at any time if there is a hint of impropriety.
This would serve as an additional safeguard to ensure there are no scofflaws.
>> Without this legislation, the Tax Department will have the difficult task of tracking compliance for thousands of individuals.
Under the current law, all that’s required is to simply post a tax ID for each listing. Unfortunately, this doesn’t necessarily ensure that taxes are paid and it certainly doesn’t ease the regulatory burden for the department.
On the other hand, HB1850 would make registered tax brokers liable for all users’ tax liabilities while allowing the department to more easily monitor just the brokers and, if necessary, subpoena all records for individual users if problems were to arise.
This is a great opportunity for Hawaii to take a step forward by passing this bill.
We can support our economy, provide revenue for the state, and still continue the important discussion at the county level of how to create balance in our communities with the emergence of vacation rentals.
We are the Aloha State, renowned for embracing people of all backgrounds and varying views. Let’s live up to that reputation and help our neighbors renting their homes and the visitors who choose to stay there.
45 responses to “Tourism’s alternative accommodations deserve support”
Leave a Reply
You must be logged in to post a comment.
Local politicians have sold-out Hawaii. From overcrowding, extreme traffic, lousy sewer system. There is nothing to marvel at in Hawaii anymore. Tourists can travel to other destinations that provide the things Hawaii used to, for far less. Not to mention the local attitude towards them.
AMEN…
It is sad to read this lopsided editorial. This is not a win-win situation for those who live next to these transient vacation rentals. The constant partying by visitors who do not care or respect the neighborhood is simply unacceptable. Unlike a hotel, there is no security or front desk to quell the inappropriate behaviors. As the neighbor next door, I have to reluctantly call the police. My sleep is disrupted when the tourists roll into the backyard at 10 pm and they explore the backyard after the plane has landed. Properties in beach communities are being explicitly purchased to rent out as TVUs. Folks who support this initiative either have a vested financial interest and do not care or understand how TVUs negatively impact the neighborhoods. We see the same arguments being made for legalizing drugs and gambling. Dangling potential tax dollars to sell out the communities is simply not right, not pono.
“…Tourism is the largest industry in Hawaii…” and therein lies the problem. Increasingly, Hawaii is becoming a wagon being pulled by one horse. Unfortunately that horse produces mostly low-paying jobs. As the tourist industry expands, so do lower scale jobs. Expanding tourism into residential zoned communities reduces the inventory of long-term rental housing and likewise increases the cost of housing by virtue of the income-producing, business-like nature of the property. This in turn increases housing costs, which outpace wage earnings. This leads to higher costs to government to supplement housing, education, health, and welfare. The authors correctly point out, “…the state would receive badly needed funds…”. But how could that be? Is not their visitor industry dominated economy booming? Then why is the legislature about to pass a budget again (in which the bulk of the spending is consumed by education, health and welfare) in which it will expenditures are more than it takes in in tax revenues? Follow the trail and it leads you back to a wagon being pulled by one horse.
oops: correct next to last sentence “…and in which the expenditures are more than it receives in tax revenues?
strong unions in Hawaii make our hotel workers the best paid workers in the world.
Hotel workers are but a small part of the labor sector that caters to the visitor industry. For the most part most others are not organized, nor will be the labor force associated with the illegal TVRs the authors are espousing. Really now, “…best paid in the world…”. Is that a fact, or is that just part of your fictional universe from which you troll so well?
Hotels are major employers in our tourist industry. And yes they’re better paid than mainland hotels workers which makes them the best paid in the world.
It’s no accident that sugar cane workers are also the best paid agricultural workers in the world. They have a strong union.
Here’s a problem with this bill. On the North shore of Oahu, the sixties drug dealer surfers laundered around forty million dollars of drug derived money by buying properties which they now rent out to tourists using the internet. At the same time, the same group drives out any competition that shows up in the territory. They make all the usual noise about others while raking in the loot by maintaining control over their territory. Clean up the drug trade first and stop them from bribing street level city inspectors then come back to the legislature.
NICE! There are those, like yourself, who know the UNDERLYING-TRUTHS; and then there are those who simply believe what they read (which is deliberately designed to mislead the reader aka THE PUBLIC). KUDO’S TO YOU!
Wow! Mythman nailed it!
Keep the country country, brah…(while I rent out my Sunset Beach home and live in my new Krakaako $30mil penthouse apartment…)
Sounds good but how about in the interim at least collect the taxes that are owed the state so that they don’t have to focus on how to raise taxes for the rest of us? What these guys are saying is that their legitimate lodgings in resort districts can compete better if the crooks at least have to pay their taxes. As for your desire to get rid of the dealers – remember how Al Capone was finally put away . . .
These two guys are in the top echelon of Castle Resorts. They are making record profits. They got the city and state bending over backward for them, using taxpayer moneys to fund their advertising and some of their infrastructure.
Now they want our neighborhoods.
HERE, HERE!!
Hear, hear!
“We are the Aloha State, renowned for embracing people of all backgrounds and varying views. Let’s live up to that reputation and help our neighbors renting their homes and the visitors who choose to stay there.”
The use of Alinsky tactics to push their agenda.
They construct a symbol: The “Aloha State”. A marketing ploy developed by ad men to market tourism in Hawaii in the mid to late 40’s and 50’s using part of a
the Hawaiian culture’s human nature to help others in a hard, at times hostile environment, while totally ignoring the second half of the equation. (Yes, we will help to house, feed and cloth you after your long journey across the expansive ocean. But we expect you to pitch in and after your recovery from your journey to make yourself a helpful, hard working member of our community. We do not expect you to be hanging on the beach doing nothing all day, just to come to our home at the end of the day and eat the fish that one of us went to sea to catch and the poi that another of us bent over in the sun all day to harvest. Our charity only goes so far. if you insist on acting like that, do not be surprised if you are kicked out of our village.)
Now that the symbol is set, we move to Alinsky’s rule number 4: “Make the enemy live up it’s own book of rules”. Now that we accept that this is the “Aloha” State (which has been forced down our throats, even though people who were born here or have lived here a while know this is one of the most prejudiced places in the world), we are hit with this: “Let’s live up to that reputation…” A reputation made by people who weren’t even from here in the first place.
If you have the audacity to question or disagree with this, expect rule 5 to come into play: “Ridicule is Man’s most potent weapon”…obviously, I’m a racist, closed minded local who hates outsiders and should be shunned by everyone. I am probably ugly and have bad breath too, like all other knuckle draggers.
And all because I thought an area zoned “residential” was meant for homes and not for vacation rentals. What a maroon, I probably believe that areas zoned for “Agriculture” were meant for real farms that grow things, not palatial homes with a stalk of corn hidden in the back 40.
EXCELLENT!! LOVE IT!!! (although you didn’t mention the four (4) hired “pickers” who come once a year, for one day–to satisfy the code for AG Subdivisions–and sell the worthless produce to pig-farms, grab a receipt, and run…
B R A V O
UMMMMM I think we are going about this backwards. HOW ABOUT ALLOWING THE VACATIONS RENTALS TO BE LICENSED FIRST before considering this sort of thing.
“backwards” is the historic direction of Local Hawaii Government–with no rearview mirror…
It’s a choice. Local gov’t may choose not to regulate the practice. And wait to see what goes on elsewhere in Hawaii.
Same old rag. Change zoning, then talk about legalizing matters. Otherwise shut up with the propaganda.
Legalizing comes first because taxing is important.
Zoning not so much. It might be good to wait and see if any BnBs are built in Pearl City for example before posing an outright ban on them in PC.
Baloney. Criminal activity makes money and that’s supposed to be reported and taxed already.
Nope. Unregulated legal activity is not criminal. Vacation rentals aren’t hotels. They shouldn’t be regulated as such.
Violating the land use ordinances can be prosecuted as either civil or criminal…
After reading Mr. Wall and Mattson’s diatribe, I notice a key word was missing from their editorial – “Illegal”! Over 90% of the vacation rentals in residential zoning on Oahu are illegal and the vast majority of neighbors don’t want them in their neighborhoods. As currently written, Bill 1850 CD1 will help hide the illegal operators from land-use inspectors by removing their TAT license number from the ads. The City and County of Honolulu DPP asked for an amendment that would require the tax brokers to verify their listing are legal. The senate approved the amendment by a majority, but the House and Senate leadership took it out! Why and who influenced them to take it out is the big question…maybe the seven lobbyists hired by Airbnb?
Property owners have rights. Neighbors must prove what harm BnBs will bring to the neighborhood.
Your property rights statement is false. No one has the right to break zoning laws. Zoning law cases have made their way to the US Supreme Court and the court has always ruled in favor of a municipality’s zoning laws. You don’t have the right to build a structure over 40′ in residential zoning and don’t have the right to run a hotel-like business in residential zoning. Furthermore, Neighbors don’t have to prove any harm, they have the “right” to demand our laws are enforced.
There is no right to have any zoning that infringes on your neighbors rights.
For example, you cannot have any zoning that allows you to make loud noises all day and nite.
BnBs are not >40ft and are not hotels.
Wiliki; you have no right to change your property’s land-use from residential to resort without following the correct land-use due process. The law states vacation rentals are a conforming-use for resort zoning, not residential. And according to the American Hotel & Lodging Association, vacation rentals are considered lodging businesses that offer the same overnight lodging service as a hotel, motel or inn. How do you like those apples?
There is a significant movement to rename “The Aloha State” to “The NIMBY State”.
Sign up now and join the fun!!
It’s more likely to be called “The Homeless State” as we allow illegal businesses and greed to take over our residential communities.
Sadly, but typically, we’re the 50th State to apply for that name.
We’ve always been both the NIMBY State and the Aloha state.
This article makes a lot of sense. We should not be trying to kill the Golden Goose of Tourism in Hawaii, simply because we don’t like tourists.
Killing the Goose? See http://www.staradvertiser.com/business/business-breaking/tourism-industry-set-new-arrivals-spending-records-in-2015/
what do you call abolishing vacation rentals?
If our Hotels are full and spending is up, Why exactly do we need to fill our neighborhoods with rooms? We are spending money on rail to help eleviate the traffic that tourism causes and we are paying for it. Enough with the tourists already., lets just always stay full and keep our prices up if it is always sold out. DO NOT build more rooms to fill our small island with more tourists, we have enough of them already.
Alternatives to lawlessness deserve our support. If real aloha is such an important component of the tourism industry, they should work to cultivate it in the community the industry lives in. When the industry comes to the community the right way, the community will respond. Until then, spare me your platitudes.
I’d like to tell you a story. our 1st place to live in after military duty was in a townhouse. 2 of the most worst neighbors i the neighborhood was next to us. maybe we didn’t get a lot of parked cars and visitors every night but we got loud yelling constantly, very night. then they came the rats and then the cats rats on one side and the cats on the other. ever see ticks coming into our home, by the hundreds. after 10 years of that, we had to move and now we are happier.
what i’m trying to say is, if you are not happy with your neighbors just move, you’ll be happier.
have a nice day
Why don’t you move Abe? After all, you operate an illegal vacation rental and you’re not happy that your neighbors and the community doesn’t like it…
Illegal vacation rentals take supply away from the housing market, thus driving up rents and sales prices. That’s the real issue here. Not tax collection. Stop with the three-card Monte, already.
It’s quite simple really. They make money from the tourists who enjoy staying in my neighborhood.
I no longer enjoy living in my neighborhood. I am the one who has to leave. My neighborhood changes to a visitor destination. Visitors no longer want to come to my neighborhood because it’s not a neighborhood anymore. End of story.