New York, Hawaii, Alabama, Michigan, Minnesota, and Texas Increasing Hotel and Travel Taxes for Visitors in US

Friday, February 28, 2025

Several states across the United States, including New York, Hawaii, Alabama, Michigan, Minnesota, and Texas, are actively increasing hotel and travel taxes for visitors. Some states have already implemented these tax hikes, while others are set to introduce new surcharges in the coming months. These increases target both traditional hotels and short-term rentals, aiming to fund tourism infrastructure, conservation efforts, and public services. As a result, travelers to these states should prepare for higher lodging costs, as local governments work to sustain and enhance their tourism economies

New York Implements Short-Term Rental Tax

Starting January 2025, New York State implemented new tax regulations targeting short-term rental properties such as Airbnb and Vrbo. Under the new law, these rental platforms must now register with the state and pay sales and occupancy taxes, just like hotels. The initiative ensures that short-term rental operators contribute to local tourism development, infrastructure maintenance, and public services.

Hawaii Introduces Additional Tourism and Conservation Fees

Hawaii has long imposed some of the highest tourism taxes in the country, but as of 2025, the state has implemented further increases. The statewide hotel tax remains at 10.25%, while some counties have added an additional 3% surcharge on top of that. Hawaii lawmakers are also considering an environmental fee that would be charged to incoming visitors to help fund conservation efforts.

It turns out the highest tourism taxes can be found right here in the United States. Honolulu tops the list with a staggering 10.25% tax rate plus a 3% surcharge, translating to an average nightly tourism tax of $51.70. With the average hotel room in Honolulu costing $390, a week-long stay could rack up $361.93 in taxes—and that doesn’t even include resort fees. These high taxes reflect Hawaii’s efforts to balance tourism revenue with the need for infrastructure and environmental preservation.

Alabama Increases Lodging Tax in Mobile

Mobile, Alabama, recently raised its lodging tax from 8% to 10%. This increase is part of a broader initiative to fund tourism-related projects and improve infrastructure for both visitors and residents. The additional revenue is expected to support tourism promotion, public spaces, and local attractions.

Michigan Raises Tourism Tax in Detroit

In early 2025, Michigan passed a law allowing Detroit hotels to increase the tourism tax to 3.5%. This change is designed to generate additional revenue for tourism marketing, local attractions, and infrastructure projects. The tax hike aligns with Detroit’s efforts to attract more visitors while ensuring sustainable tourism growth.

Minnesota’s Minneapolis Moves Forward with a 2% Hotel Surcharge

Minneapolis is advancing plans to create a Tourism Improvement District (TID), which would introduce a 2% surcharge on hotel bookings. This initiative, supported by 73% of hotels in the city, is expected to generate $6 to $7 million annually for tourism promotion and infrastructure projects. Officials are finalizing the details before full implementation.

Texas Expands Travel-Related Taxes in Plainview and San Antonio

Plainview, Texas, enacted new regulations in December 2024, requiring short-term rental properties such as Airbnb to obtain permits and pay a hotel occupancy tax. This move ensures that private rental operators contribute fairly to the local economy, just like hotels.

In San Antonio, officials are discussing a potential increase in hotel and rental car taxes to help finance a new arena for the San Antonio Spurs. While not yet finalized, this proposal could significantly impact visitors staying in the city.

What This Means for Travelers

With multiple states increasing hotel and travel-related taxes, visitors should expect higher lodging costs in affected destinations. While these tax hikes aim to fund tourism infrastructure, conservation efforts, and public services, they could also make travel more expensive.

Travelers planning trips to these states should stay informed about updated tax rates and budget accordingly. As more states and cities explore similar measures, the trend of rising travel costs is likely to continue across the United States.