Hospitality Industry: Mounting Concerns Over Success of LA28 Olympic Games
A minimum wage law targeting hotels threatens to put more economic pressure on the hospitality industry ahead of the 2028 Summer Olympics
Los Angeles, CA (October 23, 2024) – The hospitality industry of Los Angeles raised mounting concerns Wednesday regarding the success of the 2028 Olympic Games following a vote by the Economic, Community Development and Jobs Committee to drastically increase labor costs. The committee approved a proposal to increase the hotel minimum wage annually, reaching $30 an hour by the Olympic Games — even though hotel room rates for the Games are already locked in. This raises serious questions about whether hotels will be able to afford to host millions of visitors for the Games.
The Hotel Association of Los Angeles previously raised concerns about the affordability of the wage proposal, asking City officials instead to find a compromise that addressed wages on a more reasonable schedule.
Below, hotel general managers and owners explain the impact this wage ordinance will have on employees, services and amenities:
Mark Beccaria, Partner/Owner Representative for Hotel Angeleno
"The impact to Hotel Angeleno will be over $850,000 per year. Common sense says you cannot raise wages over 30% in less than a year when revenue is flat. If this increase in labor costs passes, we will be forced by the City to consider converting this hotel in the heart of residential Brentwood into a homeless shelter."
Mark Davis, CEO Sun Hill Properties, Hilton Universal
Construction of an addition to the Hilton hotel in Universal City was recently approved by the Los Angeles City Planning Commission.
"My group is evaluating the economic sensibility of land acquisitions to build elsewhere compared to continuing to invest more in Los Angeles, where the hospitality industry is the target of wage and workplace requirements that no other industry is subject to. If we pull our new hotel development it will be a real sad loss for Los Angeles in construction jobs, permanent jobs, and sales and transient occupancy taxes.”
George Unseld, General Manager, Hotel Per La
"From an operational standpoint, we are still dealing with the impact of the Hotel Worker Protection Ordinance. As a result, we have had to cut back on services, hours and positions as we are not able to meet our mortgage payments nor are we able to set aside reserves for maintaining the asset. We are at risk of having to close our doors, affecting over 100 jobs."
Kara Bartelt, General Manager, Hoxton Los Angeles
"Hotels are in support of fair wages for all, but we cannot focus on one interest group to the detriment of others and to the detriment of jobs. What good is a wage increase if there aren't any jobs? If the City continues down this path and only listens to one side of the equation, there will be hotel closures, lost jobs and lost opportunities for all."
Andrew Jay, General Manager, Hollywood Roosevelt
“Running a hotel looks easy, but it’s not. Many L.A. hotels, including mine, lose money for months at a time. Instead of preserving jobs, economic growth and City tax revenues, this law will create empty buildings and jobless workers — right when we need to be ready for the Olympics.”
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