It will come as no surprise that Los Angeles hotel owners, faced with the prospect of an insanely high $30 minimum hourly wage for their workers — as passed by the L.A. City Council and signed into law by Mayor Karen Bass — are both cutting back their staffing and, as Inc. magazine reports, delaying “costly but necessary renovation work.”
And thus, as anyone who has ever been to a hotel realizes, the quality of the guest experience will go down, and, well, fewer people will stay in Los Angeles hotels.
This economic blow to hoteliers comes at a time when there had been such hope for the hospitality industry. COVID-era restrictions have been fully lifted. A feared recession has not come to pass. The current FIFA Club World Cup matches at the Rose Bowl and elsewhere are an international draw that was seen as a kind of warm-up to the Southland hosting the Summer Olympics in 2028, with hundreds of thousands of foreign and domestic travelers needing a place to lay their heads.
Instead, with international travel to the United States already plunging — especially absent are the angry Canadians — amid rancor over President Donald Trump’s trade wars, L.A. hotels can’t catch a break. And the business is already hurting in the city, the Wall Street Journal reports: “L.A. hotels have been slower bouncing back from pandemic disruptions than those in other cities. They still post 15 percent lower per-room revenues than they did in 2019, amid rapidly rising costs that have pushed rates up. That has led many budget-conscious visitors to Los Angeles to opt for cheaper options like AirBnB rentals.”
The last thing the hotel business in the city needs is to have to spend its time and resources on politics. But its battle with City Hall and its employee unions has forced its hand. The law, passed in May, and set to fully go into effect within three years, also applies to workers at LAX — so don’t expect those $18 pre-flight pints of beer to get any cheaper. In response, the American Hotel & Lodging Association (AHLA) is rushing to get some 93,000 voter signatures for a ballot initiative that would block the wage hike. The signatures need to be gathered by the end of June — just a few more days. If the issue gets on the 2026 ballot, the $30 wage would be blocked until then (the current large hotel — 60 rooms or over — minimum hourly is $22.50).
Not to be outdone, the Unite Here union of hotel workers is rushing to qualify a ballot initiative of its own for a 2026 vote: A $30 minimum wage for all workers in the city of Los Angeles. Not content to have dealt a body blow to their own industry, the union wants to make it incredibly harder for all businesses in the city to stay afloat.
Next year, when the actual soccer World Cup will see several matches played in the Southland, when the Super Bowl is here, as well as the NBA All-Star game, it’s as if Unite Here wants to create an economy in which there will be no hotels in the city of Los Angeles to stay in. Or, for that matter, to work in.
“The quality of the experience is going to go down. And that’s going to hurt tourism, and it’s going to leave L.A. in sort of an embarrassing situation when it comes to the World Cup and the Olympics,” Jon Bortz, chief executive of the Pebblebrook Hotel Trust, told the Journal. His group owns the Mondrian Hotel in West Hollywood and the W in Westwood. “We would love to sell … but nobody will buy them,” he says.
