HomeMy WebLinkAboutKohala Coast Resort Association (submitted by Stephanie Donoho)
July 20, 2026
Matt Kanealii-Kleinfelder, Chair
James Hustace, Vice Chair
Committee on Finance
Hawaii County Council
25 Aupuni Street
Hilo, HI 96720
Comments on Bill 173 Establishing a Bed and Breakfast Home Classification for Real Property Taxes;
Establishing a 3% Cap on Valuations; Establishing Temporary Tax Amnesty
Dear Chair Kanealii-Kleinfelder, Vice Chair Hustace, and Members of the Committee on Finance,
Thank you to Councilmember Heather Kimball for introducing this measure and for her past work on comprehensive
vacation rental legislation. Mahalo to Councilmember Ashley Kierkiewicz, and to past Councilmembers Karen Eoff and
Dru Kanuha for their leadership. We understand that regulating the visitor accommodations sector is challenging and
nuanced, and we appreciate .
For nearly 20 years, Hawaii County has struggled to adequately create and enforce state and county laws concerning
short-term vacation rentals. As the Tourism Specialist with the Department of Research and Development,
Managing Director Bill Takaba and I began working on short-term vacation rental equity back in 2007. At the time
the vacation rentals existed on Hawaii Island, where they were located,
and how to communicate with the owners and visitors utilizing those properties in case of emergency. Unfortunately,
the County still have a fully functional system. But significant progress has been made, and we look forward
to even more improvement throughout the rest of the year.
When reviewing this new legislation, efforts to date.
The Council passed legislation in 2018, regulating un-hosted rentals. The State of Hawaii provided the County of
Hawaii with the ability to assess its own Transient Accommodations Tax (TAT) of up to 3%, when the Hawaii State
Legislature , in 2022. In 2025, the Hawaii County
Council passed a bill requiring registration of all short-term vacation rentals and proof of collection of TAT, general
excise taxes (GET), and real property taxes (RPT) which Mayor Alameda signed into law in June 2025.
Unfortunately, the implementation of that law has been delayed by the Council multiple times. Bill 175, which is
currently moving through the process, will give authority to the Planning Director to implement
that law, with registration between September and December 2026.
The Hawaii County Council also listened to concerns of short-term vacation rental owners in 2024 and authorized
the Department of Research and Development to undertake an economic impact study. They hired Hunden Partners,
which published its report in June 2025, and presented it to the Council in September 2025. That study showed that
there are more than 8,000 active short-term vacation rentals operating on Hawaii Island, and that Hawaii County has
been failing to collect an estimated $15 million annually in tax revenues from those operators. When multiplied out
over the 20 years the county has been struggling with registration
The Kohala Coast Resort Association produced its latest Economic and Community Impact Report with Kloninger
and Sims earlier this month. Kloninger and Sims also Visitor Plant Inventory, Timeshare
Reports, and Vacation Rental Reports in partnership with DBEDT. Our Executive Summary from that report is
attached.
Our association is comprised of the developers, hoteliers and timeshare managementcompanies within Mauna Kea,
Mauna Lani, Waikoloa and Hualalai Resorts. Our latest report shows that there are approximately 1,100 short-term
vacation rentals operating on the Kohala Coast, some managed by our members and some managed by the owners or
other management companies. The vacation rentals on the coast comprise less than 14% of the total for our island.
We have a number of concerns with Bill 173:
The 3% cap for homeowners class property tax rates is to help Hawaii Island homeowners stay in their
homes. It is not an incentive to run visitor accommodations businesses out of those homes. All other
property tax classes operating in the visitor accommodations sector (hotel, apartment, residential Tiers I, II
and III) have no caps. Their property taxes are tied to market values. This 3% cap for the proposed Bed and
Breakfast class would therefore not be equitable with other visitor accommodations types.
Many part-time residents within our resorts, currently assessed under the residential class
($11.10/$14.50/$17.00 per $1,000 valuation, based on their property values), vary the amount of time they
spend on island, and rent out their property for the remainder of the year which is an allowable use within
our resort zoning. If those owners stayed the required number of days in a given year, would they qualify for
the homeowners class, or this new Bed and Breakfast class? If so, that decline in RPT revenues could be
significant, as the vast majority of the Tier II and Tier III residential classes are located on the Kohala Coast.
The homeowners class rate ($5.75 per $1,000 valuation) is a significant savings from what other visitor
accommodations sectors pay for real property taxes ($11.10 - $17.00 per $1,000 valuation based on value).
Allowing a homeowner to keep rate and run a visitor accommodations business is not equitable.
The temporary tax amnesty proposed in the bill is not specific. Visitor accommodations pay a multitude of
taxes to the County of Hawaii TAT, GET and RPT. Some of those taxes were enacted by the State of
Hawaii and the County of Hawaii may not have the authority to provide amnesty for the collection of those
taxes. Providing any tax amnesty to owners in one type of visitor accommodation does not create a level
playing field with the owners of all of the other visitor accommodations.
This measure does not address one of the primary goals the Council said it wanted to undertake while
creating short-term vacation rental legislation: to try to return inventory in the housing arena being used as
vacation rentals to full-time local residential use. Instead, this legislation could do the opposite, incentivizing
the transition of more local homes to short-term vacation rental use.
This measure does not adequately address another housing creation incentive that the Council recently
adopted: allowing accessory dwelling units (ADUs) to be built on properties within specific zoning areas.
Could this measure allow a homeowner to build an ADU on their property and rent it as a vacation rental, or
move into that new ADU and rent their former home as a vacation rental, all under the same 3% tax cap and
Bed and Breakfast class?
For all of these reasons we believe this measure needs further refinement, so that all Hawaii Island taxpayers
operating in the visitor accommodations sector are treated equally.
The Kohala Coast Resort Association is a collection of master-planned resorts, situated north of the Ellison Onizuka Kona
International Airport at Keahole. KCRA members employ more than 5,625 Hawaii Island residents, supporting more than
8,600 family members, at our hotels, timeshares, golf courses, restaurants, shopping centers and spas. In 2025 KCRA
members paid nearly $120 million in GET,TAT and TOT to the State of Hawaii and $44 million in TAT, GET and RPT
to the County of Hawaii. our resorts, collectively paid
$196million in property taxes to Hawaii County in 2025, accounting for 35.4% of all property tax collections.
Sincerely,
Stephanie Donoho
Administrative Director, Kohala Coast Resort Association
PO Box 6991, Kamuela, HI 96743 * (808) 747-5762 * kohalacoastresortassn@gmail.com * www.kohalacoastresorts.com
2026 Executive Summary - KCRA Economic and Community Impacts
The Kohala Coast consists of a twenty-mile stretch on the northwest shore of the Island of Hawaii. The Kohala
Coast is a part of both the North Kona and South Kohala districts of Hawaii County. The KCRA was established
in 1984 by the developers of the master-planned resorts along the Kohala Coast. Over the last 42 years, the KCRA
has grown to include Hualalai, Waikoloa, Mauna Lani and Mauna Kea Resorts, as well as the hotel and timeshare
management companies located within those resorts.
KCRA members have invested billions of dollars in private funding to develop and maintain the infrastructure
within the resorts, which are utilized and enjoyed by residents and visitors alike. These include roadways, water,
wastewater, parks, restrooms, shopping centers, historic sites, interpretive signage, and community facilities.
When combined, the amount paid by KCRA members for GET, TAT, property taxes, payroll for their employees,
construction and renovation projects, marketing efforts, agricultural enhancements, and charitable donations
equates to nearly $881million for 2025 alone. In addition, visitors staying within the resorts spent an additional
$500 million on food, entertainment and shopping on Hawaii Island in 2025.
KCRA members operate 3,078 hotel rooms and 1,091 timeshare units. The resort also contains 1,152 short term
vacation rental units and 70 condo units. KCRA resorts also include shopping centers, golf courses, spas, and
restaurants representing more than 100 small businesses.
KCRA members represent 6 of the top 10 private employers on the island according to Pacific Business News.
Collectively KCRA members employ nearly 5,626 residents, and support more than 8,652 community members.
The average salary and benefits package for employees of KCRA member properties is nearly $103,628 per year,
with starting salaries for full-time positions at $66,345 annually. Starting hourly rates for employees are more
than $18/hour with typical compensation for tipped employees at $76,256.
The vast majority of KCRA members' employees live in zip codes neighboring the Kohala Coast (96738, 96740,
96743, 96755, 96727). Less than 10 percent of KCRA members' employees live in East Hawaii.
In 2025 KCRA members paid nearly $120 million in GET,TAT and TOT to the State of Hawaii. They paid more
than $44 million in TAT, GET and RPT to the County of Hawaii.
and residents who own property within our resorts, paid $196 million in property taxes to Hawaii County in 2025,
accounting for 35.4% of all property taxes.
Member resorts have spent more than $372 million on construction and renovations in 2024 and 2025, and
anticipating spending nearly $800 million between 2026 and 2030. These construction upgrades allow Hawaii
County to keep its competitive advantage as a visitor destination, while creating numerous jobs for other residents
statewide in the construction industry.
KCRA members actively participate in the Hawaii Island Destination Management Action Plan (DMAP) and
have led efforts on Hawaiian cultural education programming for visitors; promotion of local agricultural
products through their restaurants and retail outlets; as well as stewardship and maintenance of the natural
resources along the coastlines where resorts are located. KCRA resort employees supplement the work of our first
responders and emergency services with privately funded safety and security personnel and lifeguard programs
benefiting visitors and residents alike. In addition, KCRA members actively participate in the marketing and
management activities of the destination, supplementing the funding allocated to the Hawaii Tourism Authority
and Island of Hawaii Visitors Bureau, spending nearly $110 million in private funds in the last two years with
projections of almost $200 million more between 2027 and 2030.
KCRA is proud that the leadership teams for our hotels, timeshare management companies and resorts are
comprised of hundreds of local residents. At seven of our member properties more than 40% of their managers are
from Hawaii, with one property leading our efforts with 85% of its management team from the state.
KCRA members are incredibly generous, collectively donating $2.5 million annually to local non-profit
organizations. One signature event, hosted at KCRA member properties, is the Hawaii Lodging and Tourism
Visitor Industry Charity Walk, which reached a new fundraising goal of $700,000 in 2026.
In addition to their substantial financial contributions, employees at KCRA member properties also volunteer
thousands of hours annually to community organizations. As leaders within their respective resort communities,
KCRA members also introduce part-time and full-time residents who live in their respective resorts to
philanthropic opportunities across the island and the state. As a collective, we work hard to address the high cost
of living for members of our community who fall into ALICE designations.
o KCRA members regularly support the Hawaii Island Food Basket, Salvation Army food drives, and their
chefs and culinary teams provide support for community meal programs, such as the one at St. James
Episcopal Church in Waimea, which reaches more than 950 families each week.
o KCRA members are highly invested in environmental causes including:
Legacy Trees initiative, where more than 65,000 koa trees have been planted to protect watersheds;
s with the Nature Conservancy and Hawaii Island Land Trust; and
ship with the Waikoloa Dry Forest initiative. KCRA members
family members regularly gather for beach and road cleanup projects all along the Kohala Coast.
o Many KCRA members volunteer with different hula halaus, cultural clubs, sports teams and educational
groups to and interests. Our members sponsor performances
promoting the Hawaiian, Japanese, Portuguese, and Chinese cultures that make up our diverse island. We
also host running, cycling, triathlons, paddling, golf, tennis and youth sports clinics and events.
o Our KCRA team members serve on the board of directors for business, arts and cultural organizations;
support educational, religious and community organizations; and even help defray the costs of education
and home ownership, through our resident-driven ohana foundations.
In addition to the arenas mentioned above, KCRA members provide vital support for other sectors including:
retail 3 shopping centers, restaurants, art galleries and pop-up small business incubators; services real estate,
architecture, landscape, interior design; special events festivals, sports, weddings, photography, florists; natural
resources stewardship - trails, bays, beaches, anchialine ponds, signage; and cultural preservation - historic sites,
petroglyphs, and native Hawaiian cultural education programs.
Sustainable tourism management is exemplified by the members of the KCRA.
KCRA Board Members
Craig Anderson, VP Operations, Mauna Kea Resort President
Charlie Parker, Regional VP and General Manager, Four Seasons Hualalai Vice President
Mark Goldrup, General Manager, Waikoloa Beach Marriott Secretary
Pete Alles, General Manager, Mauna Lani, Auberge Resorts Collection Treasurer
Pat Fitzgerald, CEO, Hualalai Investors Board of Directors
Todd Temperly, General Manager, Fairmont Orchid Board of Directors
Tracy Stoltz, Managing Director Rosewood Kona Village Board of Directors
Scott Head, VP Resort Operations, Waikoloa Land Company Board of Directors
Nick Kuhns, General Manager, Hilton Waikoloa Village Board of Directors
Rob Gunthner, Area VP Resort Operations, Hilton Grand Vacations Board of Directors
Stephanie Donoho, Administrative Director, Kohala Coast Resort Association
PO Box 6991, Kamuela, HI 96743 * (808) 747-5762 * kohalacoastresortassn@gmail.com * www.kohalacoastresorts.com