Several bills are being considered right now by the Hawaii Legislature which, if they become law, will dramatically affect the portion of my business that supports owners of vacation rentals. It is critically important that other small business owners in Hawaii who also depend on tourism or directly support owners of vacation rentals become aware of how this law can affect them. If the bills are passed, owners who live off-island may no longer be permitted to manage their own rentals and, starting this July, will be forced to turn over their properties to Property Management groups who will charge 20-50% of their rental income for managing their properties. Many owners simply will be unable to break even or turn a small profit if this happens. It is predicted that a large number will be likely to sell or foreclose their properties or revert them back strictly to personal use.
For owners that do not sell, they will have to reduce spending in many ways to stay afloat. All of the owners are worried that they will no longer have acceptable occupancy rates and will not be able to continue to invest in the upkeep of their rentals. My experience has been that the self-managed units are almost always the nicest ones and also have the most guests. Since owners will not have money any longer to upgrade, they will not be supporting local businesses like construction or those that sell products for remodels and improvements such as furniture and appliances. An owner of a Kihei Upholstery shop said approximately 30% of her business comes from these vacation rental owners.
No one can predict how it will affect overall tourism to Hawaii but many feel that a lot of visitors strongly prefer the direct contact with an owner instead of working with a Rental Pool. Fewer choices will cause them to consider other options for their vacations. So this will affect everyone who depends on Hawaii's tourism economy.
An unfortunate thing about these bills is they were originally intended to reduce or eliminate illegal/unpermitted vacation rentals operating in our local neighborhoods. Existing laws are being violated by these unlicensed operators, who will likely continue to ignore those laws or any new ones that may be adopted. Law abiding owners who hire individuals like me will be negatively impacted, as will I.
WHAT YOU CAN DO
If you want more information to understand what's in these bills or would like to help provide testimony to oppose these bills: You can find specific information on the legislation at the http://www.hawaii.gov/ website. The bills are HB1706, HB1707, HB2078 and SB2089. Here is a link for one of the bills http://www.capitol.hawaii.gov/measure_indiv.aspx?billtype=HB&billnumber=2078. If you want more information or need help to understand what these bills are about you can also contact this group http://www.rboaa.org/. If you feel these bills will hurt your business or Hawaii, and would like to submit your testimony to oppose them here: http://www.capitol.hawaii.gov/measure_indiv.aspx?billtype=HB&billnumber=1706 and hit the Blue SUBMIT TESTIMONY button near the top of the page.
We the undersigned oppose legislative bills HB1706, HB1707, HB2078 and SB2078. Not only will they cause significant harm to off-island owners of vacation rentals, these bills will harm the local Hawaiian economy and the small businesses who earn their living by supporting vacation rental and tourism industry. Some small businesses will have to close. It's hard enough to earn a living and provide for our families, please don't make it worse.
These bills don't even address the problems with illegal TVRs in our local neighborhoods.
Please KILL these measures.
Mahalo for taking the time to read this letter.