A showdown brews between city hall and the hospitality industry as rising labor costs collide with a struggling market
Jun 30, 2025
Hotel owners in Los Angeles are pushing back against the city’s newly approved ordinance mandating a $30 minimum wage for hotel workers by 2028—what union leaders call the highest in the nation. While labor advocates argue the raise is necessary to meet L.A.’s soaring cost of living, hoteliers warn of severe consequences, including service reductions, stalled renovations, and declining property values. The dispute comes as L.A. prepares to host global events like the World Cup and Olympics, yet remains one of the weakest U.S. hotel markets in recovery.
Key takeaways
- Historic wage hike: L.A. will gradually raise hotel worker wages from $20.32 to $30/hour by 2028, affecting hotels with 60+ rooms. Long Beach has approved a similar increase to $29.50.
- Industry rebellion: Hotel owners are petitioning to suspend the ordinance and threatening to cancel service offerings, renovations, and room allocations for the Olympics.
- Economic concerns: L.A. is already among the slowest recovering hotel markets post-COVID, with RevPAR still 15% below pre-pandemic levels (adjusted for inflation).
- Labor costs climbing: Labor costs per occupied room in full-service hotels have risen to $250/month—up 36% from 2019.
- Event revenue doubts: Owners argue major upcoming events like the World Cup and Olympics won’t significantly offset the higher wage burden, since they coincide with peak travel seasons.
- Union justification: Unite Here Local 11, the driving force behind the wage push, says the increases are necessary for workers to afford L.A.’s housing and benefit from the anticipated tourism boost.
- Wider impacts: Hotel owners fear the ordinance will force cutbacks in services like valet parking and restaurant operations, ultimately degrading guest experience and hurting tourism appeal.
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