Kauai’s example for monitoring illegal vacation rentals could be useful here
As Hawaii takes steps towards rebuilding its economy in the wake of the COVID-19 pandemic, all eyes are on the changes to travel restrictions and how to safely reopen the state to tourism. Halting trans-Pacific and interisland travel to reduce the spread of COVID-19 was critical to protecting our residents but has, unfortunately, come at a cost. Throughout this crisis, Maui has been hit especially hard, having gone from the state’s lowest unemployment rate in March (2.1 percent) to the highest in August (21.4 percent).
To foster a robust economic recovery — both now as we enter a phased reopening and consider long-term growth — it is crucial that fair and effective regulations are in place to welcome travelers back safely. Legal vacation rentals will be essential to these recovery efforts because research has shown that families who choose to stay in vacation rentals are more likely than their resort counterparts to support locally-owned businesses, keeping tourism dollars within the community.
Vacation rentals are a critical component of Maui’s economy, supporting not only homeowners and property managers, but also the maintenance workers, housekeepers, and local contractors whose jobs depend on servicing these rentals. Recent data from the Department of Business, Economic Development, and Tourism show that in the second quarter of 2020, Maui County lost a total of 22,000 jobs — 63.6 percent of which were in the accommodations sector. Ensuring that legal, tax-paying vacation rental owners can safely continue operations will be necessary to help bring back many of these jobs.
Despite the very real economic benefits vacation rentals offer, we understand that “bad actors” can hurt the community. As the world’s leading online travel platform, Expedia Group wants to support our legal vacation rental owners who pay their taxes and work to provide a high-quality, clean, and safe guest experience. Expedia also wants to be the leader in enforcement against illegally operated properties who hurt the legal operators and take away essential business. For Maui County, illegal rental properties rob you of hundreds of thousands of dollars in tax revenue.
Kauai has shown that platform-based solutions can counteract these illegal rentals and create a win-win situation for both the county and those who rely on vacation rentals to make ends meet. In June 2020, Kauai entered into a historic Memorandum of Understanding (MOU) with Expedia Group. As the first cooperative agreement between a travel platform and any government entity in Hawaii, the MOU was designed to help the county effectively enforce its vacation rental laws, while simultaneously protecting Kauai’s tourism industry by allowing legal, responsible vacation rental owners to operate.
This agreement requires a tax map key (TMK) number for every property advertised on websites under Expedia Group’s brand, such as VRBO. Expedia Group submits monthly reports of property listings to the county, who is then able to ensure all listed properties are operating legitimately.
Kauai Mayor Derek Kawakami, Planning Director Ka’aina Hull, and other county officials worked with our team at Expedia Group for nearly a year to reach this agreement, clearing a path forward for visiting families and responsible rental owners. The MOU’s signing came at a critical time for Kauai’s recovery during the COVID-10 pandemic. With the MOU in place, our partners have certainty that their operations can continue once travel to Hawaii is open. They can also rest easy knowing that the illegal rentals — which have made all vacation rentals look bad — are not going unchecked, and the county has assurance that the community isn’t being robbed of much-needed tax dollars as it rebuilds its economy.
We commend Maui Mayor Mike Victorino and his team for their excellent response during the unprecedented COVID-19 pandemic, and look forward to working with him, the Maui Planning Department & Planning Commission, the Maui County Council and other officals to find a positive solution tailored to Maui’s unique needs.
* Max J. Sword is the Hawaii policy director for Expedia Group.