A Living Wage for LA’s Hospitality Sector?

Los Angeles is contemplating a substantial increase in the minimum wage for hotel and airport workers, potentially reaching $30 per hour by 2028. This initiative aims to provide a more sustainable income for those employed in the city’s vital tourism sector. The proposal, recently advanced by the Economic Development and employment Committee, is now headed for a full city Council review.

The Proposal: Incremental Increases and Healthcare Provisions

The proposed plan outlines a phased approach to wage increases. Starting in July, the minimum wage would rise to $22.50 per hour, followed by annual increments of $2.50. this would culminate in a $30 per hour minimum wage by 2028, coinciding wiht the arrival of the Olympic and Paralympic Games in Los Angeles.The plan also includes provisions for healthcare, with employers initially required to contribute $8.35 per hour per employee to cover medical costs, a requirement now slated to begin January 1, 2026.

Currently, many Americans struggle with financial insecurity. According to a 2025 US & World Report survey, approximately 42% of Americans have no emergency savings, and 40% could not cover an unexpected expense of $1,000. This proposal aims to alleviate some of that financial strain for hospitality workers in Los Angeles.

Council Divided: Support and Concerns

While the proposal has garnered support from some council members, including Councilman Hugo soto-Martínez, who stated, Now is the right time to do the right thing for workers, it also faces opposition. Councilor Traci Park, representing District 11, which includes los Angeles International Airport (LAX), voted against the increase, citing concerns about the potential economic impact on airport hotels and businesses.

We are promoting a 50% increase in salaries and medical care costs while our entire tourist economy is in crisis, which directly impacts our sales taxes, commercial taxes, Tot taxes (hoteliers) and everything else that impacts the budget of our city.

Councilor Traci Park

Park fears that such a significant increase in labor costs could harm the city’s tourism economy, potentially impacting sales taxes and hotel revenues.

Training Mandates and Potential Exemptions

Along with wage increases, the proposal includes a training requirement for cleaning staff in hotels with over 60 rooms. this program would mandate a minimum of six hours of training, covering topics such as employee rights and responsibilities, human trafficking awareness, and violence prevention.This initiative mirrors similar policies already in place in Santa Monica and West hollywood.

Recognizing potential economic hardships, the draft ordinances include provisions for exemptions. Hotel owners facing bankruptcy risks, potential closures, workforce reductions of 20% or more, or a decrease of more than 30% in employee work hours may apply for an exemption from the cleaning training requirement. Similarly, airport concessionaires with fewer than 50 employees can request a one-year exemption from the new wage and health benefit requirements due to economic difficulties.

Broader Implications for Los Angeles

The City Council would also be required to update existing municipal ordinances related to decent wages and minimum wages for hotel workers.These ordinances ensure fair compensation and benefits for municipal contractors and hotel employees, including paid time off.

Kim Nakashima, Director of Policies and research of the City Transportation Department, noted that while international visits to Los Angeles remain below pre-pandemic levels, metric levels have stabilized compared to the previous year. The proposed wage increase could further impact the city’s tourism sector, potentially influencing travel and consumer behavior.

Statewide Tourism Booms, But Los Angeles Braces for Potential Downturn

While California celebrated a record-breaking year for tourism in 2024, Los Angeles faces a potentially challenging period. Governor Gavin Newsom announced a statewide tourism impact of $157.3 billion, a 3% increase from the previous year. However, projections for 2025 paint a different picture for the city of angels, with anticipated declines in overall and international visitor numbers.

International Travel Declines impacting LAX

The Los Angeles Tourism and Conventions Office forecasts a significant year-on-year reduction in international visitors, estimating a decrease between 25% and 30%. This downturn is already evident in air travel statistics. Visit California reported substantial drops in trips to the state in February and March, with air travel from Canada down 15.5%, Mexico down 24.2%, and the United Kingdom down 22.1%.

John Ackerman, Executive Director of Los Angeles World Airports (LAX), highlighted the severity of the situation. canada flight reserves to the United States fell more than 70% in early 2025, which led the airlines to cut more than 300,000 seats from LAX airport to October. These cuts reflect a broader trend of reduced international travel, impacting the airport’s operations and revenue.

Minimum Wage Debate Adds to Economic Uncertainty

Adding to the concerns, a proposed minimum wage increase has sparked debate among hoteliers, airport vendors, and labor unions. Business owners fear that increased labor costs could force closures, while labor advocates argue that the measure would stimulate the local economy and support working families.

Rosanna Maietta, Executive Director of the US Hotel and Accommodation Association, voiced concerns about the potential impact on the hotel industry.Hotel employees in Los Angeles receive the highest salaries in the country,but right now their jobs are at risk. She warned that the proposed wage increase could jeopardize jobs and negatively impact tax revenues, potentially hindering the city’s ability to host major events like the 2026 World Cup, the 2027 Super Bowl, and the 2028 Olympic Games.

Kurt Petersen, co-president of Unite Here Local 11, countered that the wage increase would benefit local workers and the city as a whole. City leaders have the opportunity to ensure that the Olympic and Paralympic Games benefit from Angelian workers, and this ordinance does that precisely.

Financial Concerns and Budgeting Challenges

The potential decline in tourism revenue raises concerns about the city’s financial stability. According to Director Nakashima, Even with some confidence, there are many reasons for concern. He cautioned that the current economic conditions will take time to be reflected in the city’s tax collection.

Ackerman also warned about the potential financial burden on airport partners due to the minimum wage increase. I am not making judgments on costs, but before any type of cost pressure at this time, we believe that some of them will decide to get out of our market and use their capital in the competition, which will leave us with the dilemma of leaving an empty store … or try to replace that partner with another company.

Interestingly,a recent survey revealed that 40% of consumers do not have a budget. Financial experts suggest that this may be due to the perception of budgets as restrictive or negative. This lack of financial planning could exacerbate the impact of economic downturns on individuals and businesses alike.

Looking Ahead: Navigating Uncertainty in the Tourism Sector

Los Angeles faces a complex situation, balancing the need to support its workforce with the challenges of a potentially declining tourism market. The outcome of the minimum wage debate and the city’s ability to attract international visitors will be crucial in determining the future of its tourism sector. As the city prepares to host major international events,addressing these economic headwinds will be essential for ensuring long-term success.