Hawaiʻi’s economy could lose over $750 million in tourism spending

TechNet, the national, bipartisan network of innovation economy CEOs and senior executives, released results of a new survey of travelers that finds people are less likely to travel to Hawaiʻi when informed about proposed legislation to prohibit short-term rentals in Hawaiʻi. This includes Maui Mayor Bissen’s proposal to phase out approximately 7,000 short-term rentals on Maui.

The study revealed that one in four visitors to Hawaiʻi could be deterred from visiting if short-term rentals are prohibited. Visitors also overwhelmingly reported being less likely to travel to Hawaiʻi if hotel prices increase as a result of proposals like Mayor Bissen’s to phase out short-term rentals. The survey also found that such proposals could cost Hawaiʻis economy more than $750 million in tourism spending at a time when state and local tourism sectors are still recovering from the 2023 wildfires. Visitors who stay in short-term rentals contribute significantly to the local economy, spending over $300 per day on local restaurants and experiences.

Furthermore, the survey found more than half (55 percent) of Hawaiʻi residents believe new short-term rentals restrictions like Mayor Bissen’s will have negative consequences on the tourism economy and local businesses. 73 percent of Hawaiʻi residents also believe enforcing short-term rental prohibitions will increase illegal activity.

“This study points to the significant consequences of restricting short-term rentals in Hawaiʻi,” said David Edmonson, TechNet Senior Vice President of State Policy and Government Relations. “Phasing out these accommodations could deter vital tourism, disrupt local businesses, and stall economic recovery at a critical time. Short-term rentals not only provide essential cost savings and amenities for travelers but also support local communities by driving spending to neighborhood restaurants and businesses. Prohibiting short-term rentals risks creating long-term harm to the state’s tourism economy, which is a lifeline for countless local businesses and residents.”

This survey comes at a critical moment, as new UHERO economic findings show the Maui proposal could create a loss of $900 million in local visitor spending, and Maui County Council is set to discuss the proposal in June.

Methodology

TechNet partnered with Penta to conduct a representative survey among past and prospective visitors to Hawaiʻi from the United States and Canada, including Hawai’i residents. The survey was conducted from August 23-30, 2024. Past visitors were defined as those who have visited Hawaiʻi previously. Prospective visitors were defined as those who have a visit to Hawaiʻi booked or are likely to book in the next three years. Hawaiʻi residents are defined as adults (18+) who currently live in Hawaiʻi. Read the complete survey results here.

Key Findings:

  • When travelers are informed about proposed legislation to phase out short-term rentals, there is a significant impact on travel intent to Hawaiʻi.
    • Approximately one in four travelers (25%) say they are less likely to visit Hawaiʻi after learning about proposals to phase out short-term rentals.
    • Just under half of travelers (44%) say phasing out short-term rentals would change how they approach their stay in Hawai’i and the majority of travelers (60%) say their trip would be altered in some fashion.
    • Visitors overwhelmingly (70%) say they are less likely to visit Hawaiʻi after learning about the potential for hotel prices to increase if short-term rentals are phased out.
  • Hawaiʻi residents believe phasing out short-term rentals will have negative consequences on the tourism economy and local businesses.
    • The majority of Hawaiʻi residents (69%) believe that prohibiting short-term rentals will have a negative impact on the overall economy.
    • More than half of Hawaiʻi residents (55%) are concerned about how phasing out short-term rentals will impact local businesses.
    • The vast majority of Hawaiʻi residents (73%) believe enforcing short-term rental prohibitions will increase illegal rental activity.
    • Hawaiʻi residents (68%) believe phasing out short-term rentals will negatively impact visitor experiences.
      • Hawaiʻi residents and travelers overwhelmingly agree (75%+) that proposals to phase out short-term rentals will result in travelers having fewer accommodations that suit their needs and will impact the affordability of lodging options.
      • 2/3 of Hawaiʻi residents (67%) are less likely to recommend Hawaiʻi as a travel destination if short-term rentals are prohibited.
  • Short-term rentals are popular for a myriad of reasons highlighting its importance as a segment of the accommodations market.
    • Past visitors who have stayed in short-term rentals in Hawaiʻi overwhelmingly (91%) indicate they had great experiences.
    • Visitors surveyed listed the following as primary reasons for opting to stay in a short-term rental in Hawaiʻi:
      • 54% said desire to experience local neighborhoods
      • 48% said cost savings
      • 40% said more space and amenities
      • 35% said availability of accommodation options in the area
      • 32% said proximity to friends or family
  • The impact of proposed legislation to phase out short-term rentals will be evident in the significant decline in tourists and those staying at short term rentals, deeply affecting the tourism industry that Hawaiʻi relies on.
    • Visitors who stay in short-term rentals are spending a substantial portion of their travel expenditures on both local dining and experiences when visiting Hawaiʻi.
      • Visitors who stay in short-term rentals spend an average of:
        • $110 a day on local restaurants – dine-in seating
        • $82 a day on local restaurants – quick serve
        • $135 on hotel resort restaurants per day
        • $98 a day on rental cars
        • $495 over the course of the trip on local tour companies
  • Visitors indicate they often choose short-term rentals in Hawai’i for cost savings and the opportunity to immerse themselves in local neighborhoods, benefits that would be significantly diminished by staying in a hotel.
  • A little less than 1/3 of Hawaiʻi visitors stay or are planning to stay for roughly two weeks.