Tourism industry faces hurdles on wages in L.A.

Two City Council members joined a coalition of hoteliers Tuesday to warn against what they see as potential impacts of a proposal that would increase the minimum wage for tourism workers to $30 an hour by 2028.

Councilman John Lee, who represents neighborhoods in the west San Fernando Valley, said the city is already facing a staggering $1 billion shortfall in the 2025-26 fiscal year. A plan to raise the minimum wage for hotel and airport workers would only make the "situation dramatically worse," as the tourism and hospitality industries are already feeling the impacts from COVID-19, federal policies and January's wildfires.

According to the councilman, LA tourism drives $25 billion in visitor spending and supports 540,000 jobs, while also supporting city services. Hotels alone generate roughly $290 million annually through hotel taxes, and in the last two years, the city has lost a projected $28 million, Lee added.

"At this critical moment in our city history, we cannot afford to bring legislation to the table that will make things worse and further drive down tourism," Lee said.

Councilwoman Traci Park, chair of the Trade, Travel and Tourism Committee, echoed Lee's concerns. She described the proposal as an unprecedented increase, even in the strongest economy.

"But our economy is not strong right now. This is especially true for the tourism sector, which is hanging on by a thread," Park said.

The councilwoman added that domestic and international travel at Los Angeles International Airport are still below their 2019 levels, with air travel down by 30%. She noted that overall airport concessions have decreased as well.

Rosanna Maietta, CEO of the American Hotel and Lodging Association, was one of about 30 people who joined the council members for a news conference at City Hall to criticize the proposal. Representatives for Los Angeles County Business Federation, Hotel Association of Los Angeles, Asian American Hotel Owners Association, L.A. Area Chamber of Commerce and Valley Industry Commerce Association were also in attendance.

"Hotel employees in Los Angeles are paid the highest wages in the country, but right now their jobs are at risk," Maietta said. "City leaders are considering a damaging proposal that will jeopardize these jobs; it would devastate much needed tourism related tax revenue and lead to the closure of hotels that are desperately needed to successfully host the 2026 World Cup, the 2027 Super Bowl and the 2028 Olympics."

Kurt Petersen, co-president of Unite Here Local 11, the union supporting the so-called Olympic wage proposal, criticized Lee and Park for siding with "billionaire CEOs" at a time when Angelenos are struggling to stay housed.

"Raising wages for tourism workers keeps tens of thousands of families in their homes and boosts our local economy instead of lining corporate pockets. City leaders have an opportunity to ensure the Olympic and Paralympic Games benefit hard-working Angelenos and this ordinance does just that," Petersen said in a statement.

Sonia Ceron, a dishwasher at Flying Food Group, an in-flight catering company that packages and prepares meals for international flights out of LAX, said in a statement that as a single mother she has to decide between paying bills or buying healthy food for her daughter. She said the proposal would support families like hers.

"The hotel industry and airport employers like Flying Food Group can cry all they want but the reality is that without our labor they wouldn't exist," Ceron said in her statement.

In December 2024, the City Council voted 12-3 to instruct the city attorney to prepare draft ordinances to effectuate the minimum wage increase. Park, Lee and Councilwoman Monica Rodriguez opposed the measure.

According to city officials, the draft ordinance is expected to be heard by the Economic Development and Jobs Committee on May 6.

Workers like Ceron could see their hourly wages increase to $22.50 an hour in July, followed by a jump to $25 an hour by 2026, $27.50 an hour by 2027, reaching $30 by 2028 -- when the Olympic and Paralympic Games arrive in the L.A. region. They would also receive a new $8.35 per hour payment to cover healthcare.

The proposal aims to update the city's Living Wage and Hotel Workers Minimum Wage ordinances.

The Living Wage Ordinance applies to city contractors and ensures that employees are paid a set living wage, setting a cash wage rate and health benefits. The Hotel Workers Minimum Wage ordinance requires hotel employers with 60 or more guest rooms to pay their employees the specified minimum wage and provide 96 compensated hours of off time, and at least 80 additional hours of uncompensated time off per year.

City officials have discussed exemptions for concessionaires with 50 or fewer employees at LAX, as well as some hotel owners under specific conditions.

In terms of travel, United Airlines is also negotiating a contract with the Teamsters aviation maintenance technicians.

"We'll work hand in hand with our tourism partners, but make no mistake, it's going to be a rough path forward to return to pre-COVID numbers," Hotel Association of Los Angeles CEO Jackie Filla said.

As the industry looks to recover, Filla reiterated that advancing the so-called Olympic Wage proposal at this point is the "absolute wrong time."

According to Filla, the hotel industry can be seen as a drowning person. The city can throw them a life jacket by pausing the proposal and its implementation or throw them a brick.

"... Then we'll go out of business, and we know that because that's already happening," Filla said.

Additional reporting by City News Service.