Aloha and Happy New Year!

Mahalo for the support, the forwards, the replies, and the feedback. We’re kicking off 2026 the same way we ended last year: no fluff, no PR spin, no nonsense. Just the stuff that actually matters in Hawaiʻi hotels and tourism, plus a generous side of opinion and the occasional side-eye.

Big mahalo to our sponsors, Allana Buick & Bers’ (ABB) Mechanical CAPEX Services, which help property owners stay ahead of aging HVAC and mechanical systems through strategic, data-driven capital planning. Their in-house architects and engineers deliver a turnkey solution, assessing needs, designing improvements, and managing projects, so your team can stay focused on operating the building.

In this issue, the Green Fee arrives, Hilo lands a mainland route, we revisit the Minatoya List and who Minatoya actually was, break down some asset-light math, introduce a new AI acronym, and much more!

If you’ve been finding these updates helpful (or at least entertaining), please share them with a colleague or friend. The more folks we bring in, the stronger this hui becomes.

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Thanks for sticking with us. The Hui’s just getting started!

Let’s dive in.

Mahalo,

Dan Wacksman
Hawaiʻi Hotel Hui Insider Editor-in-Chief 😄

The Green Fee Arrives. Accountability Pending.

As of January 1, 2026, Hawaiʻi’s Green Fee is officially live, increasing the state TAT rate by 0.75 percentage points, from 10.25% to 11%. Hotels and vacation rentals are collecting, while the cruise ship tax is on hold after the Ninth Circuit Court temporarily blocked enforcement during the appeal.

For hotels, this effectively raises the cost of every stay and puts operators back in the familiar position of explaining tax policy at checkout, right alongside everyone’s favorite - resort fees, don’t get me started. BTW- Did you know resort fees get taxed also 🤦‍♂️.

The idea is well-intentioned: approximately $100 million a year for climate resilience, conservation, and “sustainable tourism,” guided by a new advisory council. The process is what’s concerning. The money flows through the general fund, and allocation requires legislative approval. Project-by-project details are still TBD, and allocations will be decided later through the recommendation budget process. What could go wrong?

We’ve seen this movie before with the TAT, which started as an earmarked fund for specific use, until it wasn’t. Without named projects, real dollar commitments, and hard guardrails, we are skeptical that the Green Fee won’t be redirected to uses beyond its stated intent.

So how do guests see these (and other) fees? Here’s an actual rate display from an Oʻahu hotel. No HHH commentary needed. 😲

Hawaiʻi Tops On-Time Flights List. In Other News: The Ocean Is Wet.

I always get a chuckle when Hawaiʻi is ranked the best state for on-time flights. As Guy Hagi says, we have the best weather on the planet. No snowstorms, rare major weather events, and most long-haul flights only operate once a day. Once the plane gets here, it usually parks overnight and behaves itself.

The study found just 12.7% of flights to, from, and within Hawaiʻi were delayed or canceled between July 2024 and June 2025, best in the nation. Weather aside, that kind of consistency still takes coordination, so kudos to the airport teams and airline ops for keeping things moving. For contrast, the worst airport in the study was Orlando International, where a brutal 32.4% of flights were delayed or canceled. Turns out a lot of people may leave the “Happiest Place on Earth” only to finish their vacation somewhere far less cheerful. 😉

Read More

In other airline-related news, Southwest is giving Hilo its first nonstop to/from the continental U.S. in more than three years, launching Las Vegas to Hilo service on August 6, three times a week. Hilo hasn’t had a direct mainland flight since United ended its LAX service in early 2023, so this is a meaningful win for the Hilo side. That said, I have a feeling this route may see more locals in slippahs and board shorts trying their luck in Vegas than sun-starved tourists filling up Hilo hotels.

It’s time to go all-in on direct.
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When destination resorts package with air, they can offer more competitive pricing, giving travelers another reason to book direct. Tambourine is helping hoteliers bring the convenience of "one-stop shopping" to hotel websites without handing the relationship (or margin) to an OTA.

• Create an OTA experience on your hotel site, smooth shopping, fewer clicks, less friction

• Offer a lower overall price through bundled air + stay

• Less than 5% cancellation on packaged bookings (because people commit when flights are involved)

Who Was Minatoya, and Why Does It Matter?

Last issue’s Bill 9 discussion (Maui County’s attempt to roll back certain legacy short-term rental rights) got me thinking about something basic but important: who exactly was Minatoya, and why is his list so important? 

The Minatoya List traces back to Richard Minatoya, a former Maui County deputy corporation counsel. In the early 2000s, his legal opinion, later upheld by the Hawaiʻi Supreme Court, allowed vacation rentals that were legally operating before zoning changes to continue as lawful, nonconforming uses. In short, the county tried to shut them down, lost in court, and the Minatoya List was born.

That ruling is the backbone of today’s issue; the list covers thousands (~6,000) of condominium units whose short-term rental use was explicitly protected by the courts. 

Minatoya himself passed away in 2018, but his legal legacy is very much alive. That’s why Bill 9 is different from past regulatory battles, as this is an attempt to unwind court-recognized property rights through legislation.

And those once “quiet conversations” about carve-outs are not so quiet anymore. Proposals circulating at the county level could exempt as many as 4,500 units from Bill 9’s reach (nearly 70% of the list!).  While Bill 9 has passed, clearly, nothing is settled, and the first court cases have already been filed.

Just when he thought he was out…

In what is probably the shortest retirement since Tom Brady, Dave Erdman is back. The founder and longtime CEO of PacRim Marketing Group, who sold the company to Vector in 2017 and stayed on to run it through the pandemic, and years of growth before moving into an advisory role and stepping down last year, has been named interim president and CEO of the Retail Merchants of Hawaiʻi, effective January 7. 

Given his Japan ties, we offered an otsukaresama deshita not long ago. That didn’t last long. So I guess now we are we have to continue the trend and say Okaerinasai, Dave.

Paradise Cove Closes. Making Room for Dukes and Mixed Feelings.

After more than 40 years in Ko Olina, Paradise Cove Lū‘au is officially closing. The site is being cleared for redevelopment with plans for a new cultural and entertainment complex called Waianiani at the Cove. 

Before it’s gone for good, Paradise Cove is auctioning off just about everything. Tiki statues, canoes, furniture, golf carts, and more. A true end-of-an-era fire sale.

Duke’s at the Cove will anchor the new project. I love Duke’s and Hula Pie on the west side is winner. No argument there. But I still can’t help feeling a little nostalgic. It was kitschy, sure, but in a good way. It knew exactly what it was, and the location couldn’t have been better. It delivered memories, not just a show. Here’s hoping whatever replaces it remembers that part matters too.

Hotel Performance

Hotel performance data will be published in the first issue of each month.

Click here for the full DBEDT breakdown: Seats, stays, and then some.

Hyatt, Playa, and the Asset-Light Playbook

Hyatt acquired Playa Hotels & Resorts in early 2025 for $2.6 billion, then quickly sold most of the underlying real estate. The $2 billion sale of 14 resort assets to a KSL Capital Partners–backed group closed last week, with Hyatt retaining the long-term management contracts. If KSL sounds familiar, it should. The firm owns Outrigger Resorts and Hotels, the Sheraton Kauaʻi Coconut Beach Resort, and a long list of other properties worldwide.

In other words, Hyatt no longer owns the buildings, but it still runs the hotels, controls the brands, and collects the fees.

This is where it gets interesting.
Ownership vs. management, asset-light math, and why Hyatt walks away smiling.
→ Continue reading

Local Ownership. Long-Term Stewardship.
-Sponsored-

MacNaughton Hospitality is a locally owned and operated Hawaiʻi hospitality group built on relationships between people, places, and the communities it serves. The team owns and manages a growing portfolio of award-winning hotels and dining experiences, guided by the same stewardship and attention to detail that has defined MacNaughton’s work across the islands, from Park Lane Ala Moana to thoughtfully developed neighborhood retail.

Their approach is hands-on and grounded in respect for local culture. They believe hospitality works best when it feels personal: guests feel invited in, teams feel supported, and properties are cared for with intention. Day to day and long term, the focus is simple: create places that are welcoming, well-run, and true to where they belong.

New York Times Story That Should Get the Industry’s Attention

There was a really interesting article in The New York Times last month, How Much More Can the U.S. Travel Industry Take?, that cut through the usual tourism chatter and surfaced some uncomfortable realities about where U.S. travel actually stands heading into 2026.

The headline takeaway is simple: international travel to the U.S. is going backward. Industry estimates cited by the Times project 4.5 million fewer foreign visits in 2025 compared with 2024, the first post-pandemic decline. Canada has led the pullback, with arrivals down nearly 26% year to date, followed by declines from Germany at almost 12%, France at 7%, and South Korea at roughly 6%.

That matters because international visitors punch above their weight. They stay longer, spend more, and last year still accounted for nearly $179 billion in U.S. travel spending. That figure is expected to fall by about $6 billion in 2025, even as domestic travel volumes remain strong. In other words, domestic demand is filling rooms, but it is not fully replacing lost international dollars.

And here’s the part worth paying attention to.
What’s driving the downturn, why the U.S. is the outlier globally, and why Hawaiʻi is extra exposed.
→ Continue reading

Another Acronym Enters the Chat: MCP

Just when you finally figured out what an API was, or let’s be honest, you just nodded along, it’s time for a new acronym.

If you haven’t heard of MCP yet, you probably will in 2026.

MCP stands for Model Context Protocol. The easiest way to think about it is this: APIs were built so systems could talk to each other. MCP is built so systems can talk to AI. In hotel distribution terms, it’s the plumbing that lets an AI agent see real data, live rates, availability, and rules, and eventually handle things like booking and customer service.

This isn’t a travel-only thing. MCP is popping up across finance, retail, and healthcare. Travel just happens to be a great use case because it’s data-heavy, highly transactional, and built on real-time pricing and availability, exactly the kind of environment AI agents thrive in.

I keep reading articles about how hotels need to start learning and building MCPs, but let’s be real. Most hotels don’t build technology. They rent it. That means MCP connections won’t be created by hotels; they’ll be created by vendors like PMS, CRS, and other platforms. 

Meanwhile, OTAs already have clean data, massive scale, and direct connections (MCPs) into the major AI models. AI companies want the easy button. Travel is just one vertical, and OTAs make it far easier to plug in once than to wire up thousands of individual hotels.

MCP gets pitched as a way for hotels to bypass intermediaries. Maybe someday. In the near term, it’s more likely to make the biggest pipes even bigger.

Glossary for our non-hotel tech geeks

• LLM – Large Language Model. The AI brains behind tools like ChatGPT, Claude, and Gemini.

• PMS – Property Management System. The system that runs your hotel day to day: rooms, guests, rates, folios, the works.

• CRS – Central Reservation System. Where inventory and rates are managed and pushed to distribution channels.

• CRM – Customer Relationship Management system. Guest profiles, history, preferences, and marketing data.

• API – Application Programming Interface. The thing that lets one piece of software talk to another without humans getting involved.

If you are interested in Hotel terminology, we have a glossary on our website. 

Industry Events

• Visitor Public Safety Conference - January 7, 2026 (Oahu)

• PATA 2026 Annual Outlook & Economic Forecast Forum - February 6, 2026 (Oahu)

• The Hospitality Show (AHLA and HHA) - February 12, 2026

*If you have industry events to share, please email me at [email protected].

Spotlight on Hawai‘i Hospitality Opportunities

• Managing Director – Hilton Hawaiian Village (Oʻahu)

• Area Director of Marketing – PM Hotel Group (Hybrid)

• Area Marketing Manager – OUTRIGGER Hospitality Group (Kailua-Kona)

*If you happen to have any job openings, let me know. I will be glad to include them in the newsletter; send the job link to [email protected].

Pluribus Is Weird. I’m in.

I’m not entirely sure how to describe Pluribus, which is probably why I like it. It’s eerie and unsettling in the same slow-burn, vaguely disorienting way as Severance. The plot drifts, the tone is strange, and it is oddly addictive. I can’t help but think that this is an allegory for AI. 

It comes from Vince Gilligan, the creator of Breaking Bad, which immediately brought credibility. You can feel that DNA: patient pacing, quiet menace, and the sense that small moments are setting up something darker. I don’t fully know where it’s going yet, but I’m in.

It’s on Apple TV, which means I now have another streaming subscription. This whole unbundling thing is really working out well for us! They are currently dropping one episode a week (very old school), so you might want to wait until the full season drops so you can binge (and then cancel your subscription ☺️.)

On the bright side, Chief of War, also on Apple TV, is already queued up next, so at least I’m getting my money’s worth.

A new year, and I am genuinely glad we get to keep this section going. It is still one of my favorite parts of the newsletter. Disagreements, corrections, praise, and the occasional well-placed jab are all welcome. At the very least, it confirms people are actually reading. Mahalo for that, Hui.

Praise (Always Appreciated)

• “Insightful Newsletter -- Kudos to you!”

• “Congrats on your successful launch of the newsletter, how very exciting for you and your growing team.”

Corrections Department (Mahalo, eagle eyes)
Our readers continue to prove two things: they know their Hawaiʻi hotels, and they check the math.

• We made the mistake of using a stock photo listed as Maui for our story on Bill 9. An eagle-eyed reader pointed out that this was actually the Kona Tiki Hotel in Kona, Hawai’i Island.

• Another eagle-eyed reader noted that our math was off on the Maui numbers, and they were correct! We said 23,600 for Hotel+VR, but the math didn’t add up, it should be 22,600. See the correction below. BTW- Regardless, the numbers are a bit squishy depending on what source you are using.

  • By the numbers (again)

    • Maui hotel rooms: ~9,600

    • Maui legal vacation rentals today: ~13,000

    • Total visitor Hotel + VR today: ~22,600

    • Vacation rentals targeted by Bill 9: ~6,000

    • Hotel and Vacation Rental accommodations after full implementation: ~16,600

    • What that means

      • Roughly a 26.5% percent reduction in Maui’s total Hotel + VR supply

      • Roughly a 40 -45 percent reduction in the vacation rental inventory

• BTW- You do know we make these errors to see who is reading, right?  All part of the master plan ;-) 

On Bill 9 and what comes next

• “While my emotions agree with the bill and the intent to make housing more affordable (aside from the fact whether this measure will actually accomplish it), the legal question will center on whether the government can restrict the use of property that was legal when purchased. Owners will claim that the government is using de facto eminent domain without just compensation. The issue will go through courts for years.”

2026 Economy Check: Flat Is the New Optimistic
In the last issue, we asked how you are feeling about the 2026 economy. Nobody is popping champagne.

• 40.9% expect a flat, grind-it-out year

• 27% see modest growth

• 18% are bracing for a downturn

• 14% are already assuming a rough year ahead
  

Not bullish, but not panicked either. Cautious realism feels about right.

Agentic AI, Doing Actual Things

• “It's close... I booked a Turo for 2 weeks in Orlando yesterday. About 90% done by ChatGPT 5.2 agent. It picked the ride. I had to log it into Turo & I had to confirm the payment (at the agent’s request).”

Agree? Disagree? Either way, mahalo for thinking, responding, and being part of the conversation. Hit reply or send yours to [email protected]: you might end up here next year.

About Us

Hawaiʻi Hotel Hui was started by hotel industry veteran Dan Wacksman, CEO of Sassato, a Hawaiʻi-based consultancy that combines deep local expertise with a global perspective.

Our team brings decades of experience across operations, marketing, revenue, tech, and finance, all aimed at helping hotels and travel companies make smarter decisions and move faster. Whether you need additional expertise, extra horsepower, or just someone who thinks like you and moves things forward, we’ve got you. From local independents to global brands, we show up with a no-nonsense, results-focused mindset. To be blunt: we get sh*t done.

Recent projects include brand transitions, system selection (PMS, CRS, CMS — all the acronym soup), implementations, project management, feasibility studies, training, audits, and everything in between.

A lot of organizations deal with stretched teams, siloed processes, and messy tech stacks that quietly stall important work. We fix that. Happy to chat if this hits close to home.