05-05-2025
Battle lines drawn over proposed $30 minimum wage for L.A. tourism workers
A contentious $30 minimum wage proposal for tourism workers has sparked fierce opposition in Los Angeles, with hoteliers warning it could cripple an industry still reeling from January's wildfires and the pandemic.
On April 29, tourism stakeholders gathered at Los Angeles City Hall to oppose an amendment to the city's Living Wage Ordinance and Hotel Workers Minimum Wage Ordinance. The proposed measure, nicknamed the "Olympic Wage Ordinance," would incrementally raise minimum wages for airport workers and employees of hotels with more than 60 rooms to $30 per hour by 2028, coinciding with the Los Angeles Olympics.
The amendment is scheduled to be heard by the city's Economic Development and Jobs Committee on May 6 before potentially moving to the full council. If passed, the first wage hike would kick in on July 1, increasing the minimum wage rate for covered workers to $22.50.
"The city of L.A. is on the verge of adopting a policy that is going to increase operating costs for many hotels and local businesses by as much as 69% in just 60 days," said city councilmember Traci Park at the City Hall event. "It would be an unprecedented increase."
A mid-April report from the American Hotel & Lodging Association (AHLA) cited an Oxford Economics analysis suggesting that the ordinance's knock-on effects could eliminate 14,000 hotel jobs, cost $169 million in state and local tax revenue and discourage $342 million in hotel construction spending.
The Los Angeles Area Chamber of Commerce launched the Alliance for Economic Fairness, a coalition opposing the ordinance, when it was introduced nearly two years ago.
The coalition, which counts the AHLA and the California Hotel & Lodging Association among its members, reports that the developer of at least one major hotel expansion project -- the Hilton Los Angeles/Universal City -- plans to pull the plug if the wage measure passes.
"We believe in a living wage, and we've been honoring the living wage," said Maria Salinas, CEO of the Chamber of Commerce. "But this is just not sustainable at this point in time, because tourism is not back."
Los Angeles tourism's woes
Los Angeles trails most major U.S. destinations in post-pandemic tourism recovery, ranking near the bottom of the nation's top 25 markets.
And while the city's 12-month average RevPAR through March had reached 104% of 2019 levels, according to CoStar data, 15 of the top 25 U.S. hotel markets had achieved recovery rates between 110% and 145% of 2019 levels.
Likewise, room demand has recovered to just 95% of pre-pandemic levels, and a 3% increase in hotel inventory has kept occupancy approximately 6 percentage points below pre-pandemic figures.
January's devastating wildfires further hindered recovery.
"The fires really took the wind out of our sails," said Tom Kiely, CEO of Visit West Hollywood. "January and February were pretty disastrous months for us."
Labor unions: This is a cost-of-living issue
Labor organizations supporting the wage increase present a different perspective, arguing that the move is necessary to ensure tourism workers can afford housing in the expensive L.A. market.
Kurt Petersen, co-president of Unite Here Local 11, which represents more than 32,000 hospitality workers throughout Southern California and Arizona, criticized council members opposing the ordinance.
"Raising wages for tourism workers keeps tens of thousands of families in their homes and boosts our local economy instead of lining corporate pockets," he said. "City leaders have an opportunity to ensure the Olympic and Paralympic Games benefit hard working Angelenos, and this ordinance does just that."
Industry stakeholders are optimistic those events will improve the city's tourism performance.
"We've got World Cup coming, the Super Bowl and the Olympics over the next few years," Kiely said. "That is really going to boost occupancy and boost the image of greater Los Angeles."
He has already seen signs that tourism is getting back on track.
"Going into March, things picked up," he said. "April is good, and May is looking even better. So, we're definitely seeing an uptick in business return."
However, Los Angeles is being hit yet again by the recent downturn in international arrivals to the U.S. The National Travel and Tourism Office reported that overseas visitation to the U.S. fell 11.6% in March compared with the same period of 2024 and is down 3.3% year to date.
The city was already struggling from the falloff in inbound visitors, with CoStar reporting that international visitation to Los Angeles in 2024 was roughly 17% below 2019 levels. In Q1 of this year, that gap widened, with international arrivals off an additional 6%.
"The market is heavily reliant on leisure travel, particularly international inbound visitors," said Michael Stathokostopoulos, senior director of hospitality analytics at CoStar Group.
During the City Hall event, councilmember Park also expressed concern that air travel into LAX is still below 2019 levels and down by 30% compared to competitor airports.
"We've learned that in 2024, LAX fell off the top 10 busiest airports in the world for passenger traffic for the first time in well over a decade, and this year's projections are even lower than last year," she said. "Canadian and Mexican tourism to California has plummeted, leaving our hotel rooms empty."
