New York City, Las Vegas, Chicago, San Francisco, Los Angeles, Miami: How Tourism Taxes Are Shaping Travel Across the United States

From the dazzling lights of Las Vegas to the skyscrapers of New York City, America’s major destinations promise unparalleled adventures. Yet, underneath this allure lies an often-overlooked detail: tourism taxes. These taxes are transforming how we explore the country and are significantly impacting the overall cost of travel. Cities like Chicago, San Francisco, Los Angeles, and Miami are increasingly leaning on hotel and lodging taxes to finance everything from convention centers and cultural programs to climate sustainability initiatives.

What Exactly Is a Tourism Tax?

Tourism taxes are essentially extra charges added to your hotel bill or short-term rental invoice. Known variously as hotel occupancy taxes, lodging taxes, or transient occupancy taxes, these fees catch many travelers by surprise. They are specifically aimed at overnight stays shorter than 30 days, making them applicable regardless of whether you’re at a luxury resort, motel, or an Airbnb. The revenue generated helps local governments fund invaluable resources, ranging from tourism marketing to public services.

How Much Are Travelers Paying?

In the United States, the amount travelers pay varies dramatically from state to state—and even city to city. For instance, Connecticut boasts the highest statewide hotel tax at 15%, a substantial increase in costs for travelers. Hawaii, with its breathtaking beaches, adds a 10.25% Transient Accommodations Tax (TAT) to the mix, with additional surcharges bringing total lodging taxes over 13.25%. Meanwhile, New York City imposes a hefty combined 14.75% occupancy tax alongside a flat $3.50 nightly charge. Even in smaller markets, taxes can range from 5% to 12%, depending on local districts.

The Billions Behind the Bed Tax

Though these taxes can be a source of frustration for travelers, they play a critical role in local economies, generating $52.4 billion in 2023. This revenue has been vital for cities recovering from pandemic-related declines in tourism. For instance, Hawaii’s TAT alone brought in over $800 million, while New York City uses tourism taxes to maintain crucial infrastructure and public safety measures. In Las Vegas, a portion of room tax income is funneled into attracting significant conventions, making tourism a cornerstone of its economy.

Green Fees: A New Frontier in Tourism Taxation

Hawaii is leading a trend with its unique climate-focused green fee, introduced in 2025. This fee adds roughly 0.75% to lodging bills, directing funds specifically toward environmental preservation efforts. As more states grapple with the consequences of tourism on natural resources, this model signals a shift towards sustainability in the tourism tax landscape. The potential for green fees could result in substantial funding for coastal protections, totaling an estimated $100 million annually.

The Airbnb Effect: Changing the Tax Game

With the rise of short-term rental platforms like Airbnb and Vrbo, local governments are redefining tax collection methods. Many states now require these platforms to collect lodging taxes on behalf of hosts, leveling the playing field with traditional hotels. However, tax regulations can be highly variable. In Texas, for instance, Airbnb collects the state’s 6% hotel occupancy tax, but local taxes may still fall on hosts unless specific agreements are made.

Hidden Costs for Travelers—and Benefits for Destinations

For travelers, tourism taxes often feel like hidden fees, quietly inflating the cost of a vacation. A hotel advertised at $250 per night can easily rise to over $280 once taxes and fees are added, greatly affecting budget-conscious travelers. Yet these funds often contribute to essential services that enhance the traveler experience, such as beach maintenance, public transport enhancements, and marketing campaigns that drive tourists to these locations.

New York City: The City That Never Sleeps… on Taxes

When visiting New York City, tourists face a significant expense through hotel taxes, which total a staggering 14.75% plus an additional nightly fee. This revenue supports vital city initiatives, including public transport and local cultural institutions. For travelers, a nightly rate of $250 can inflate to nearly $300 due to these fees.

Las Vegas: Betting on Tourism Revenue

Las Vegas may be known for its glitz and glamour, but it also imposes one of the nation’s highest hotel tax rates at 13.38%. This revenue is vital for funding the Las Vegas Convention and Visitors Authority, which helps promote the city as a global destination for major events. Visitors contribute significantly to the local economy through these taxes, enabling the city to maintain its entertainment offerings.

Chicago: The Windy City’s Financial Gust

Chicago boasts one of the highest combined hotel tax rates in the U.S. at 17.4%. These funds are crucial for local tourism efforts and maintaining the cultural institutions that make the city distinctive. While travelers may feel the pinch of high taxes, they benefit from the various attractions that make Chicago worth visiting.

San Francisco: Funding the City by the Bay

With its stunning views and unique culture, San Francisco implements a 14% hotel tax, with additional district-level fees. Voter-driven initiatives have sought to direct tax revenues toward specific social needs, such as homelessness and arts funding. This budget approach requires travelers to be aware of these taxes but allows them to contribute to meaningful causes during their stay.

Los Angeles: Tinseltown’s Tax Take

A visit to Los Angeles also comes with a uniform 14% hotel tax. The generated funds support tourism initiatives and city services, making Los Angeles a continually attractive destination. However, travelers should remain vigilant about the added costs, particularly in bustling areas like Hollywood.

Miami: Sun, Sand, and Surcharges

Miami-Dade County has hotel tax rates ranging from 6% to 7%, contributing to crucial projects like beach renourishment and convention center expansions. Given the region’s vulnerability to climate change, portions of this funding also aim to bolster resilience against environmental threats, providing additional context for the tourism taxes.

Boston: History Comes with a Surcharge

In Boston, the blend of history and culture comes with a hotel tax rate close to 12%. These funds are used for tourism marketing and maintenance of historical sites, allowing travelers to dive deeper into the rich narrative of the city. Budget-conscious tourists should factor in these expenses when planning their stay.

Orlando: The Magic Comes at a Cost

Orlando’s renowned status as a family-friendly destination involves navigating a 6% Tourist Development Tax applied to accommodations. This revenue supports expansion of tourist infrastructure and global marketing efforts, ensuring that Orlando remains a preferred travel spot despite the additional costs.

Seattle: Rain and Revenue

Seattle’s combined hotel tax can reach as high as 15.6%. These funds are allocated toward civic initiatives, including tourism promotion and urban development projects. For visitors, the additional costs come with the unique experiences Seattle offers, making it a worthwhile investment.

Honolulu: Paradise Priced Higher

In Honolulu, the pursuit of paradise is marked by a Transient Accommodations Tax of 10.25% and potential county surcharges, pushing total taxes towards 18.7%. These taxes are earmarked for environmental sustainability efforts, showing how tourism taxes can support vital ecological preservation.

Why Travelers Should Pay Attention

Tourism taxes aggregate a significant revenue stream for states and municipalities, funding essential services and keeping destinations vibrant. For travelers, these taxes can inflate vacation budgets but serve to enhance visitor experiences through maintained public services and facilities.

Savvy travelers should remain vigilant about the fine print during booking. Often, hotel websites will feature base rates, with taxes added later, leading to unexpected costs. It’s important to be informed about local lodging taxes upfront to avoid surprises when checking out.

Ultimately, tourism taxes are the investments we make to sustain the vibrancy of the places we love. As you plan your next adventure, keep in mind that the seemingly modest increase in daily rates can contribute to the preservation and enhancement of a cherished destination.