Monday

07-14-2025 Vol 2021

Rising Tourism Taxes across the U.S. Impact Travel Costs and Local Funding

Tourism taxes are experiencing a significant increase across the United States, affecting how much travelers pay and boosting funding for local projects. These surcharges, levied on hotel stays and short-term rentals, serve to support essential services such as marketing efforts, infrastructure development, and environmental sustainability. As these taxes surge, travelers are encouraged to be aware of the various rates they may encounter in different destinations.

In Connecticut, hotels face the highest statewide hotel tax at 15%, making lodging relatively expensive for visitors. Hawaii presents another complex scenario where combined rates—including state, county surcharges, and new green fees—can reach over 18.7%. These green fees are part of Hawaii’s initiative to preserve its environment and coastal areas, reflecting a growing trend nationwide to fund sustainability projects through tourism taxes.

Cities like New York City impose substantial levies; travelers encounter a 14.75% hotel occupancy tax along with a flat fee of $3.50 per night, significantly increasing the final bill. Meanwhile, Las Vegas’s tax rate is around 13.38%, which still constitutes a notable addition to the lodging cost. Chicago’s hotel taxes are even higher, totaling approximately 17.4%, combining city and state charges.

San Francisco charges a 14% hotel tax along with various district fees, which can make stays more expensive. Los Angeles also applies a 14% hotel tax, adding to the total expense for visitors. Boston’s hotel taxes exceed 12%, a combined rate comprising state and local levies, while Orlando’s Tourist Development Tax stands at 6%, still a considerable cost for tourists enjoying the theme parks and attractions.

Seattle reaches combined hotel taxes of up to 15.6%, further emphasizing how varied and significant these charges have become. Hawaii’s recent green fees and surcharges aim to fund environmental and coastal protection efforts, with total lodging taxes nearing 18.7%. Such initiatives underline the growing emphasis on using tourism revenue to maintain the destinations’ natural beauty and infrastructure.

Travelers should be aware that these taxes are often hidden until checkout, significantly increasing final bills without prior notice. Additionally, platforms like Airbnb have begun collecting and remitting these taxes, bringing increased transparency and compliance to short-term rental bookings. This shift helps ensure that travelers are more aware of the true cost of their stay and how their spending contributes to local development and sustainability efforts.

As tourism taxes continue to rise across the U.S., travelers should plan accordingly and factor these fees into their budgets. These taxes serve vital functions for local communities, supporting everything from tourism marketing to environmental conservation, thus helping ensure these destinations remain vibrant and sustainable for future visitors.

image source from:travelandtourworld

Benjamin Clarke