Well, this paints an unpleasant picture, eh? (Kahului, Kailua: city hall, renters)

[WaikikiBoy]

Originally Posted by Tulemutt

Sure. But I think the point wondered about by hotzcats is why can’t more of the profits also stay? All of the local trickle-down would still also exist with local ownership.

The profit is the overwhelmingly smallest piece of the pie in almost every business. While it varies from industry to industry, 10% net profit margin is about average for a large corporation.

The problem is not really the little profit that may leave the island. The bigger issue is the supplies needed to run a business not being manufactured on-island. Which forces business to send money elsewhere to buy products they need to run their businesses. That’s really a bigger source of money flow than local vs non-local ownership.

[Tulemutt]

Originally Posted by WaikikiBoy

The profit is the overwhelmingly smallest piece of the pie in almost every business. While it varies from industry to industry, 10% net profit margin is about average for a large corporation.

The problem is not really the little profit that may leave the island. The bigger issue is the supplies needed to run a business not being manufactured on-island. Which forces business to send money elsewhere to buy products they need to run their businesses. That’s really a bigger source of money flow than local vs non-local ownership.

Well yeah. Good points. But some of that 10% staying in resident operators’ pockets would sure mean a LOT to them.

[whtviper1]

Originally Posted by Tulemutt

Again: sure. Agreed. Just don’t agree that more ownership / profits can’t stay with increased local operators / investors. You said hotels are lousy businesses to be in was why locals don’t own / retain more.

I said hotels are low margin businesses. And right now they are feeling serious pain.

But I repeat- if I bought a hotel as a resident of Hawaii whether it be Waikiki, Maui, BI, or Kauai I don’t see how that would be better. What would be different if I was say a resident of Nevada versus Hawaii? It ultimately doesn’t matter if I buy the hotel as a “local” or out of state or out of country purchaser. It’s all the same. The money flows in my pockets (or nowadays out of my pockets) regardless of my location. It just doesn’t matter. This utopia I will put all my profits back into Hawaii is a fallacy and actually the opposite with Hawaii’s unfriendly tax structure.

[KohalaTransplant]

Originally Posted by Tulemutt

Well yeah. Good points. But some of that 10% staying in resident operators’ pockets would sure mean a LOT to them.

Well, it might mean something to them, but how would that help appreciably improve anything in the state? Which what i think people imply when they say things like "I wish more of the profits stayed here."

[Tulemutt]

Originally Posted by whtviper1

I said hotels are low margin businesses. And right now they are feeling serious pain.

But I repeat- if I bought a hotel as a resident of Hawaii whether it be Waikiki, Maui, BI, or Kauai I don’t see how that would be better. What would be different if I was say a resident of Nevada versus Hawaii? It ultimately doesn’t matter if I buy the hotel as a “local” or out of state or out of country purchaser. It’s all the same. The money flows in my pockets (or nowadays out of my pockets) regardless of my location. It just doesn’t matter. This utopia I will put all my profits back into Hawaii is a fallacy and actually the opposite with Hawaii’s unfriendly tax structure.

Originally Posted by KohalaTransplant

Well, it might mean something to them, but how would that help appreciably improve anything in the state? Which what i think people imply when they say things like "I wish more of the profits stayed here."

I’m not actually trying to argue that hotel ownership should be localized more. Yes, I imagine it would be meaningful to locals having more ownership of businesses. I’m not suggesting it would be noticeably more beneficial to *the state*.

But I do think the increased small-operator angle has merit for, well, the small operators. There may well be more problems with that than I’ve thought of, of course.

Anyway, bottom line to the topic of over-tourism is: I don’t see small operator hosting as reducing the crush Hawaii is trying to balance.

The hotel tangent is just that: tangential to the conversation … I’ll just leave it as that.

[pj737]

Between wages to hotel local workers, health care, benefits, local maintenance staff, countless local support/ancillary industry with countless local workers, GET, TAT, commercial resort RPT, Hawaii state income tax and Waikiki Beach SID, the percentage of gross revenue generated by tourists that goes to profits is miniscule... likely 3-5% in an average year. Then the bulk of these profits are often reinvested in their local products via local acquisition, renovations and improvements. These investments are essentially constantly ongoing. So in the real world it's highly probable that only 1-3% in profits permanently leave the state. A nothing burger in the whole grand scheme of things. The hotel industry is sink or swim; they have great years but they have scary years as well. Everyone accuses them of being greedy during great times but when things are slow and depressing nobody cares.

Personally, this whole anti-tourism sentiment is nauseating. As a local, born and raised, I feel we have largely lost our culture of aloha. Having said that, I support the 180 day minimum rental requirement for the entire island with the exception of existing resort areas and the entire Waikiki district. It's time we said aloha to Airbnb and the like.

[Tulemutt]

Originally Posted by pj737

Between wages to hotel local workers, health care, benefits, local maintenance staff, countless local support/ancillary industry with countless local workers, GET, TAT, commercial resort RPT, Hawaii state income tax and Waikiki Beach SID, the percentage of gross revenue generated by tourists that goes to profits is miniscule... likely 3-5% in an average year. Then the bulk of these profits are often reinvested in their local products via local acquisition, renovations and improvements. These investments are essentially constantly ongoing. So in the real world it's highly probable that only 1-3% in profits permanently leave the state. A nothing burger in the whole grand scheme of things. The hotel industry is sink or swim; they have great years but they have scary years as well. Everyone accuses them of being greedy during great times but when things are slow and depressing nobody cares.

Personally, this whole anti-tourism sentiment is nauseating. As a local, born and raised, I feel we have largely lost our culture of aloha. Having said that, I support the 180 day minimum rental requirement for the entire island with the exception of existing resort areas and the entire Waikiki district. It's time we said aloha to Airbnb and the like.

What do you object to about short-term rentals? The way they restrict inventory for long term residents and drive up pricing, I imagine. True too. One of the consequences I earlier acknowledged comes with opening that market. And I agree, with the exception of ‘owner-occupied hosting.’

[whtviper1]

Originally Posted by Tulemutt

What do you object to about short-term rentals?

I don't want a revolving door of neighbors - especially those in vacation/party mode.

I can't think of any legitimate reason in my residential neighborhood why short term rentals should be allowed.

[Tulemutt]

Originally Posted by whtviper1

I don't want a revolving door of neighbors - especially those in vacation/party mode.

I can't think of any legitimate reason in my residential neighborhood why short term rentals should be allowed.

Sure. Fair enough.

Although I would point out that owner-occupied-operated really doesn’t often (if ever) result in *party mode* activity … and it does provide excellent operator income wholly at the local level. My daughter has operated her two STR units in the tri-plex for over six years without a single unpleasant incident of any kind. Occupancy rate has been over 90%. She and my granddaughter couldn’t survive in that home without this side business.

[Grassyknoll]

Keep in mind there are portions of every island (more so on the Big Island) where there is tourist interest in lodging, yet no hotels nearby.
We are readying our guest house to market on Airbnb. If someone wants to rent within a 40 mile radius of here, that is the only option. Dissalowing Airbnb type rentals in rural areas would have the unintended consequence of creating more traffic as folks who want to visit these remote areas now must drive there and back for every visit.
Just another angle to consider.