A new study commissioned by the Hawaii County Council is shedding light on the substantial economic and social impact of short-term vacation rentals across Hawaii Island.
Details of the study, conducted by Hunden Partners, were presented Tuesday to the Communications, Reports and Council Oversight Committee.
The report offers a data-driven analysis of how STVRs affect the local housing market, economy, tourism and residents’ quality of life.
Using 2024 data, the study included a public demand survey and a targeted list of approximately 7,000 visitors who had recently visited or expressed interest in visiting Hawaii Island. Survey responses were collected outside airports to enhance accuracy.
Among surveyed visitors, 41% reported staying in STVRs, and 24% said they would not have traveled to the island if STVRs were unavailable. Without these accommodations, Hawaii Island could lose up to $170 million annually in lodging and non-lodging expenditures. The industry also generated more than $17.7 million in transient accommodations tax and $7.1 million in general excise tax revenue.
However, as the number of STVRs has grown, the county now faces challenges related to housing affordability, tax compliance and infrastructure strain.
In 2024, lodging revenue from STVRs was estimated at approximately $710 million — comparable to total hotel room revenue on the island. The impact of STVRs extends beyond lodging, with visitor spending on food, transportation, shopping and entertainment estimated to contribute between $565 million and $862 million to the island’s economy.
On average, visitors spend about $132 per day outside of lodging, including $52 on food and beverages, $23 on entertainment and recreation, and $25 on shopping.
Still, concerns about revenue shortfalls remain. Hawaii County is collecting only $9 million in TAT from STVRs — far below the $21 million it could receive if all units were registered and compliant. According to the study, up to $12 million in TAT remains unreported, along with an additional $1.6 million in uncollected GET.
The impact of STVRs on the island’s housing market remains a contentious issue. The study found that 56% of residents believe tourism, including STVRs, has driven up housing costs, though most residents reported no significant effect on their ability to rent or buy property.
While there is a common belief that converting STVRs into long-term housing could help alleviate the housing crisis, the study shows only 4% of STVR owners would consider such a conversion. This suggests that eliminating STVRs is unlikely to offer a meaningful solution to the island’s housing shortage, the study said.
During Tuesday’s meeting, Councilwoman Ashley Kierkiewicz said the report will be instrumental in shaping new legislation.
“Many of our local residents actually do rely on this support. … If they’re completely fazed out, there is going to be significant impact to the economy, way of life, occupation,” Kierkiewicz said. “This is definitely going to help council member (Heather) Kimball and I as we begin to shape what new legislation could look like.”
According to the study, the economic impact of STVRs is especially significant in areas like Kailua-Kona, Waikoloa and Keaau, where most of the island’s 8,008 active STVR listings are concentrated.
STVRs have a notable effect on the local job market. Each unit supports an average of 1.6 full-time jobs and four part-time jobs. Should stricter regulations be imposed, the island could lose more than 12,000 full-time jobs and over 30,000 part-time jobs, the study found.
In addition to lodging, STVR visitors tend to spend more on nature-based activities, aligning with Hawaii Island’s broader tourism goals. The study found 60% of STVR users engaged in outdoor recreation, contributing to the island’s emphasis on wellness and environmental sustainability.
The county’s new law regulating STVRs — rentals lasting less than 180 consecutive days — is set to take effect Dec. 20, but likely will be pushed back to the end of March 2026 to give operators more time to comply. Introduced as Bill 47 and now known as Ordinance 25-50, the law aims to ensure that these rentals are properly registered and monitored.
Kimball mentioned ongoing efforts to keep the community informed, noting, “I wanted to just also share we did have Hunden Partners on a webinar on (Sept. 5) that is recorded and available on Hawaii County’s website.”
Councilwoman Rebecca Villegas said a recent encounter with constituents revealed the tension many feel about new STVR regulations.
“I was in Costco the other day and got cornered with lots of questions about potential short-term vacation rental legislation, and a lot of people are really afraid,” Villegas said. “I just want to express my sympathy and empathy for the people out there who are looking at their way of making ends meet and covering their mortgages feeling threatened.”
Councilman Dennis Onishi said additional county staff might be needed to enforce the new STVR rules.
“We need to look at how we can help the Planning Department to get more investigators to help with getting those numbers down of unregistered (STVRs),” Onishi said. “We are all going to need to work together with the administration to do that.”
Hunden Partners recommends Hawaii County continue to support STVRs while implementing stricter regulation and monitoring. The report suggests aiming for 100% compliance with STVR registration to capture the full economic benefits. It also proposes development guidelines for STVRs in resort zones and exploring partnerships with private developers to create affordable housing for local residents.
Email Daniel Farr dfarr@hawaiitribune-herald.com.
