HomeMy WebLinkAboutHawai'i Hotel Alliance (submitted by Jerry Gibson)
DATE: Tuesday, September 1, 2026
TO: The Honorable Rebecca Villegas
Chair, The Policy Committee on Environmental and Natural Resource
Management
FROM: Jerry Gibson
President, The Hawaii Hotel Alliance
RE: Testimony In Opposition To Bill 183 (2026)
Relating to Sewer Service Charges
Aloha Chair Villegas, Vice Chair Kagiwada, and Members of the Policy Committee on
Environmental and Natural Resource Management.
My name is Jerry Gibson, President of the Hawai‘i Hotel Alliance (HHA). On behalf of
our member properties and the thousands of dedicated hospitality professionals
across Hawai‘i Island, I appreciate the opportunity to submit testimony expressing our
strong OPPOSITION to Bill 183.
The Hawai‘i Hotel Alliance fully recognizes and understands the County’s duty to
maintain fiscal sustainability, upgrade critical infrastructure, and address the reported
$16 million budget deficit facing the Department of Environmental Management. We
share the vision of robust, self-sustaining public utilities. However, creating a separate,
punitive "Hotels" service class—with base rates and volumetric tiers escalating
significantly beyond standard nonresidential rates—places a disproportionate,
inequitable burden on our industry during a particularly fragile economic period.
HHA respectfully requests that the Council eliminate the proposed special hotel
classification (Section 3, Category F) for the following reasons:
1. Existing Massive Contributions to the General Fund and Infrastructure
Hawai‘i County’s hotels already shoulder the largest share of real property taxes
across the island, providing substantial funding directly to the County’s General Fund.
Furthermore, the County implemented a 3% County Transient Accommodations Tax
(TAT) surcharge specifically intended to offset the impact of tourism on public
infrastructure, including wastewater systems.
Singling out hotels for an additional utility surcharge ignores these vast, existing tax
contributions. In fact, several of the island’s largest resort properties operate and
maintain their own private wastewater infrastructure at their own expense, yet continue
to contribute tens of millions annually to County coffers.
2. Disproportionate Targeting of Kama‘āina and Town Center Properties
Bill 183 defines hotels per HRS § 486K-1, which primarily captures the traditional,
municipal-connected hotel properties in areas like Hilo and Kailua-Kona. These are
precisely the properties that:
● Host local business travelers, visiting family, sporting events, and cultural
gatherings.
● Provide critical emergency shelter and kama‘āina lodging.
Subjecting these specific properties to base rates of $96 per unit in 2027—climbing to
nearly $190 per unit by 2031, plus top-tier usage rates exceeding $21 per 1,000
gallons—will severely impair their operations and force cost increases onto local
residents and visitors alike.
3. Inequity Regarding Short-Term Vacation Rentals (STRs)
While traditional hotels are singled out under Category F, un-hosted short-term rentals
and transient vacation rentals embedded in residential neighborhoods will remain
categorized under standard residential or multi-unit rates. It is well established that
transient rentals impact neighborhood infrastructure in the same manner as
commercial lodging. Bill 183 penalizes compliant, brick-and-mortar hotels while
providing another regulatory loophole for short-term vacation rentals to evade paying
their fair share.
4. Severe Cost Escalations and Shrinking Operator Margins
Hotels face the exact same inflation-driven cost pressures as the County. While top-
line daily rates may appear higher due to broader inflation, actual booked room nights
have softened, and real net revenues are down across many sectors. Concurrently,
property operators are managing unprecedented overhead increases, including:
● Property & Liability Insurance: Increases exceeding 20% to 30%.
● Freight & Shipping: Supply chain costs up 25% or more.
● Labor & Utility Inputs: Substantial annual compounding operational costs.
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Layering a nearly 100% compounding utility hike on top of these escalating expenses
threatens local jobs, deferred capital improvements, and community partnerships.
The proposed rate structure under Category F is inequitable and economically
damaging. While we support the County’s need to systematically fund its wastewater
improvements, the burden must be shared equitably across all commercial and
residential users without isolating a single industry.
The Hawai‘i Hotel Alliance respectfully urges the Committee to amend Bill 183 by
removing the distinct "Hotels" user class (Category F), ensuring hotels remain
under standard Nonresidential (Category C) rates, and pursuing an equitable rate
escalation strategy that applies fairly to all commercial users and short-term
accommodations.
Mahalo for your time, leadership, and consideration of our testimony.
Jerry Gibson
President, Hawaii Hotel Alliance
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