MAUI COUNTY COUNCIL BUDGET, FINANCE AND ECONOMIC DEVELOPMENT COMMITTEE
Wednesday, July 21, 2021, 1:30 p.m.
Dear Chair Rawlins-Fernandez and Members of the Committee,
The Maui Hotel & Lodging Association (MHLA) is the legislative arm of the visitor industry. Our membership includes 171 property and allied business members in Maui County – all of whom have an interest in the visitor industry. Collectively, MHLA’s membership employs more than 25,000 residents and represents more than 19,000 rooms. The visitor industry is the economic driver for Maui County and its largest employer for local residents.
MHLA opposes amending Section 3.48.561 of the Maui County Code, Subsection B relating to tiered tax rates, to include “hotel and resort.”
Maui County already assesses the value of hotels and resorts differently depending on the size and value of its property. To create a tiered system for hotels are resorts is unnecessary, especially so soon after the pandemic shut down tourism for the state just a year ago.
This, coupled with the recent decision by the state legislature to take the $200 million that Maui’s TAT generates, thereby forcing the county to charge its own TAT – up to 3 percent – is too much too soon.
Eventually international travel will open up again and tourists will have the option of flying elsewhere. If you go to doubt that just take a look at the 777 and 797 Dreamliners that are landing at Kahului Airport. These are higher capacity planes that can carry up to 314 and 290 passengers respectively.
These planes are usually used for travel to Asia and Europe. Once those destinations open up again to travelers our visitor numbers will decrease.
I ask that before making any amendments to this section that council members wait until the international travel market opens up again to see what the effects will be to Maui’s visitor industry.
Testimony of
Mufi Hannemann
President & CEO
Hawai‘i Lodging & Tourism Association
Maui County Council
Budget, Finance, & Economic Development Committee
July 21, 2021
BFED-78: TRANSMITTAL OF LEGISLATIVE PROPOSAL RELATING TO THE
REAL PROPERTY TAX HOTEL AND RESORT CLASSIFICATION
Chair Rawlins-Fernandez and members of the Committee, mahalo for the opportunity to submit testimony on behalf of the Hawai‘i Lodging & Tourism Association, the state’s largest private sector visitor industry organization.
The Hawai‘i Lodging & Tourism Association—nearly 700 members strong, representing more than 50,000 hotel rooms and nearly 40,000 lodging workers—advocates on behalf of an industry that is still fighting to recover from the effects of a worldwide pandemic. Our people and our businesses are just beginning to recoup the losses incurred over the past year and a half, and we should be making this easier for businesses rather than more difficult. In concept, this measure could unfairly and unevenly affect the traditional, brick and mortar lodging industry that is already paying the second highest real property tax rate in the county, further slowing its overall recovery.
HLTA’s position is that now is not the time to levy additional tax burdens on an industry that supports thousands of jobs and generates billions in tax revenues for the State of Hawai‘i as well as Maui County. As it stands, property valuations continue to climb as will the total amount of funds raised through taxation. There will be a domino effect from enacting a tiered tax rate of this nature that will not only affect tourism, but also tourism-adjacent industries. For example, a tiered tax rate that applies higher rates to larger or more valuable properties will disincentivize hotels from seeing through necessary and planned renovations. This would result in further aged infrastructure as well as a net loss of jobs for the trade industry.
Moreover, a tiered tax rate would unfairly harm larger and more valuable properties. These properties, by their very nature, support more jobs for Maui residents and already generate more tax monies for the State and Maui County. It would be imprudent to levy a great tax burden on these properties, especially as we are just beginning to turn the corner on the pandemic.
For these reasons, HLTA opposes this proposed measure.
Thank you for the opportunity to offer this testimony.
MAUI COUNTY COUNCIL BUDGET, FINANCE AND ECONOMIC DEVELOPMENT COMMITTEE
Wednesday, July 21, 2021, 1:30 p.m.
Dear Chair Rawlins-Fernandez and Members of the Committee,
The Maui Hotel & Lodging Association (MHLA) is the legislative arm of the visitor industry. Our membership includes 171 property and allied business members in Maui County – all of whom have an interest in the visitor industry. Collectively, MHLA’s membership employs more than 25,000 residents and represents more than 19,000 rooms. The visitor industry is the economic driver for Maui County and its largest employer for local residents.
MHLA opposes amending Section 3.48.561 of the Maui County Code, Subsection B relating to tiered tax rates, to include “hotel and resort.”
Maui County already assesses the value of hotels and resorts differently depending on the size and value of its property. To create a tiered system for hotels are resorts is unnecessary, especially so soon after the pandemic shut down tourism for the state just a year ago.
This, coupled with the recent decision by the state legislature to take the $200 million that Maui’s TAT generates, thereby forcing the county to charge its own TAT – up to 3 percent – is too much too soon.
Eventually international travel will open up again and tourists will have the option of flying elsewhere. If you go to doubt that just take a look at the 777 and 797 Dreamliners that are landing at Kahului Airport. These are higher capacity planes that can carry up to 314 and 290 passengers respectively.
These planes are usually used for travel to Asia and Europe. Once those destinations open up again to travelers our visitor numbers will decrease.
I ask that before making any amendments to this section that council members wait until the international travel market opens up again to see what the effects will be to Maui’s visitor industry.
Mahalo for your time.
Rod Antone
Maui Hotel & Lodging Association
Testimony of
Mufi Hannemann
President & CEO
Hawai‘i Lodging & Tourism Association
Maui County Council
Budget, Finance, & Economic Development Committee
July 21, 2021
BFED-78: TRANSMITTAL OF LEGISLATIVE PROPOSAL RELATING TO THE
REAL PROPERTY TAX HOTEL AND RESORT CLASSIFICATION
Chair Rawlins-Fernandez and members of the Committee, mahalo for the opportunity to submit testimony on behalf of the Hawai‘i Lodging & Tourism Association, the state’s largest private sector visitor industry organization.
The Hawai‘i Lodging & Tourism Association—nearly 700 members strong, representing more than 50,000 hotel rooms and nearly 40,000 lodging workers—advocates on behalf of an industry that is still fighting to recover from the effects of a worldwide pandemic. Our people and our businesses are just beginning to recoup the losses incurred over the past year and a half, and we should be making this easier for businesses rather than more difficult. In concept, this measure could unfairly and unevenly affect the traditional, brick and mortar lodging industry that is already paying the second highest real property tax rate in the county, further slowing its overall recovery.
HLTA’s position is that now is not the time to levy additional tax burdens on an industry that supports thousands of jobs and generates billions in tax revenues for the State of Hawai‘i as well as Maui County. As it stands, property valuations continue to climb as will the total amount of funds raised through taxation. There will be a domino effect from enacting a tiered tax rate of this nature that will not only affect tourism, but also tourism-adjacent industries. For example, a tiered tax rate that applies higher rates to larger or more valuable properties will disincentivize hotels from seeing through necessary and planned renovations. This would result in further aged infrastructure as well as a net loss of jobs for the trade industry.
Moreover, a tiered tax rate would unfairly harm larger and more valuable properties. These properties, by their very nature, support more jobs for Maui residents and already generate more tax monies for the State and Maui County. It would be imprudent to levy a great tax burden on these properties, especially as we are just beginning to turn the corner on the pandemic.
For these reasons, HLTA opposes this proposed measure.
Thank you for the opportunity to offer this testimony.