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Maui Set To Impose New Hotel Tax Due To Influx Of Tourists 

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The Hawaiian island of Maui has announced that they will now be collecting a hotel tax from all tourists staying there in order to help them deal with the influx of tourists while recovering from the Covid-19 pandemic. 

The new 3% tax will be collected from all individuals staying at a hotel or short-term rental on the island. According to the Associated Press, this tax comes after lawmakers in the state passed a bill that would change how Hawaii allocated tax revenue to the different counties. 

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Before this new tax was implemented, the state would collect a 10% hotel tax to be distributed to each county. According to Hawaii News Now, the bill is also cutting Hawaii Tourism Authority’s budget by 24%. Maui County Council Chair Alice Lee told the media outlet that this change would help the tourism industry in Hawaii thrive overall as the world begins to reopen more. 

“This tax will help tremendously. Instead of $23 million, we’ll probably receive in the neighborhood of $50 to $70 million,” she explained. 

The push for Hawaii’s tourism sector to find new ways to gain more revenue comes as a major increase in travel, and travel plans, have emerged, especially in Maui. Maui’s Mayor Michael Victorino has reached out to certain airlines to start bringing fewer tourists to the island, as they are starting to become overwhelmed with wealthy travelers who want to escape. 

“We don’t have the authority to say stop, but we are asking the powers to be to help us,” Victorino said to the AP.

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In May 2021, more than 630,000 visitors flew to Maui. In May 2019, before the pandemic, Maui received about 847,000 tourists, so the state is currently witnessing almost pre-pandemic levels of travel while the US is still very much battling this virus and its variants. 

Maui is also one of the easiest places to travel to currently, especially for American citizens. Last week the state removed their requirement for travelers to be tested for Covid-19 before coming to the island; this stipulation only exists for fully vaccinated domestic travelers. 

Those who are not vaccinated still have to provide proof of a negative test from a “trusted medical partner site” in order to skip the mandatory quarantine period once they get to the island itself. 

Hawaii has also recently expanded their partnership with the company Clear’s Health Pass, which offers vaccinated individuals with an easy and digital way of proving their vaccination status to make travel easy. 

Governor David Ige also announced that the state plans to lift all of its Covid-19 restrictions once Hawaii reaches a 70% vaccination rate. Currently 65% of all residents have received at least one dose of a Covid-19 vaccine, and 58% are fully vaccinated. 

Hawaii Real Estate

Hawaii Real Estate Agents Report Unexpected Spike In Sales 

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Catherine Pennell is a real estate agent representing Kauai for KW Kauai Keller Williams in Hawaii, who claims that the housing industry in Hawaii has been booming since April. Pennell says she’s fielding two to three phone calls everyday from people living in the United States looking to move to Hawaii. 

“I think people are saying, ‘Life is short.’ It’s a lot of talk because they’re not here yet and they can’t get here yet, but I’ve done more sight-unseen sales than I’ve ever done during the pandemic, three in the last three months.”

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Julie Peters is another real estate agent working for Island Boutique Realty on the island of Hawaii, who recently spoke with the press about how when wildfire season began in August she was fielding at least one call each day from residents of California looking for places on the island away from all the smoke and fire danger. 

Peters recalled how “one person wanted to come over immediately and rent in the meantime because she was so done with smoke. The last five closings I did were sight-unseen. I had rarely done that before.” This seems to be a major new pattern for Hawaii real estate, but also the industry in general. Buyers are more willing to invest in properties before seeing them either because they want an immediate escape from their current reality, or due to the Covid-19 pandemic making in-person viewings difficult in many areas of the country. 

She claims that a majority of her buyers this year have been from the Bay Area. According to Title Guaranty, which owns the largest real estate database in Hawaii, from January to June 2020, California residents bought $587.6 million worth property in Hawaii, making up 41% of total sales during that period coming from the U.S..

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“Demand for Hawaii is always there, but it’s just grown exponentially this year. A lot of people that were already looking toward retirement here sped it up, or people found out they could work from home. We got a rush of that and then the West Coast fires happened.”

Hawaii is also currently enduring a massive wave of new condos and other properties being placed on the market. In August 2020 new listings for condominiums went up by 97% when compared with the previous year. Single-family homes, on the other hand, are being bought at a much quicker rate. 

Cash offers have also been the most common form of payment, as those offers are more likely to go over the initial asking price. This influx in purchasing, however, doesn’t mean that the industry in Hawaii isn’t struggling like the rest of the world. Active listings were down by nearly 20% between April – August 2020 versus 2019. Honolulu County specifically saw an 18% decline while Maui County saw a 9% dip. 

West Coast buyers have increased exponentially as well as the concept of virtual listings/house tours. The pandemic, wildfires, and lack of active travel make it nearly impossible for buyers in the US to look at spaces in real life in Hawaii to move to. This new wave of blind buying is likely just the beginning of a new era of real estate in a post-pandemic world.