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Five months ago, Los Angeles City Council approved a plan to raise wages for airport and hotel workers to $30 an hour by 2028. This calls for new medical bills in time for the city’s Olympic and Paralympic games.
For some of the LA tourism industry, the moment feels like a different era.
Since then, President Trump has launched a trade war, which has caused a major drop in travel from Canada and other countries. The city has experienced catastrophic wildfires and a massive budget crisis. By the end of March, passenger traffic at Los Angeles International Airport had fallen by nearly 5% compared to the same period last year.
Now, at the start of several wage hikes scheduled to take effect on July 1, the coalition of LA Business Leaders is urging Congress to curb the minimum wage hike, saying it will devastate an already struggling industry.
“Two hotels are closing, we are beginning to cut down on services and fire workers,” the president and CEO of American Hotels, said last week at City Hall. “If this ordinance is in place, we expect more hotels to close.”
Stuart Waldman, president of the Valley Industry and Commercial Association, provided an equally tragic warning, saying that wage increases would cause “irreversible damage” to local tourism. With the entertainment industry, which has fallen 57% this year and the construction of a new home, L.A. political leaders cannot afford to lose another sector of the local economy, he said.
“LA has destroyed housing production. Now they’re here for tourism,” Waldman said in an interview.
Despite these warnings, the Council’s Economic Development Committee signed the Tourism Wage Ordinance on Tuesday, setting the stage for a full council voting this month. If the proposal is approved without change, airport workers and employees at hotels with 60 or more rooms will see an hourly minimum wage rise to $22.50 in July, $25 in 2026, $27.50 in 2027 and $30 in 2028.
In addition to these increases, the proposal would require those same workers to receive $8.35 per hour for medical compensation starting January 1st. (Employers who already provide healthcare should either make sure the coverage is worth $8.35 per hour or make up for the difference.)
Councillor Hugo Soto-Martínez, the former hotel association organiser currently on the committee, said there was no reason to change courses.
“I understand that they look different from what they saw a year ago,” he said in an interview. “But the reality is, we live in cities where people can’t afford to buy. They don’t have health insurance. The impact and quality of life on families and children has been going on for too long.”
Here Unite co-chairman Kurt Petersen said it is hypocritical for business leaders to fight wage increases while pushing the council to spend tens of millions of dollars in preparation for renovations to the Los Angeles Convention Center. That vote was cast only last month.
Hotel owners of unionized property have shown they can afford higher wages last year, and some offer an increase of $10 per hour during contract negotiations, Petersen said.
“They just don’t want to pay workers, that’s what they are. So they came up with all the excuses in the book to protect their money,” he said.
Los Angeles has four city minimum wage laws. Hotel workers have the highest wage ($20.32 per hour) compared to the basic minimum wage for the majority of workers, $17.28 per hour.
Employees of LAX contractors, including airlines and concession businesses, pay an hourly minimum wage of $19.28. However, they also receive a minimum medical fee of $5.95 per hour, increasing the overall hourly wage to $25.23.
Under the council’s proposal, hotel workers with more than 60 rooms will see their minimum wage rise by 48% in three and a half years. At LAX, SKYCAPS, cabin cleaners and other workers will receive a minimum wage increase of nearly 56%.
Hugo Ortega, line cook for Hilton Garden Inn Lax and Holiday Inn Lax, said the wage increase package would help him pay rent and provide it to his three children. Ortega, 52, works 70 hours a week as a chef and maintenance engineer.
“I have to do two jobs to continue my family,” he said in an interview.
Supporters of rising wages have repeatedly pointed to urban commissioned research that found that high incomes from tourism workers stimulate local economies.
In recent months, the battle for the minimum wage has been heading straight into a crisis over the city’s budget. It relies on more than $300 million in hotel tax revenues each year to pay basic services such as police, firefighters and emergency services.
Mayor Karen Bass faced a shortfall of about $100 million between 2025 and 2026 and recently recommended fire around 1,600 city workers, including staff from the Los Angeles Police Department, the Department of Health and the Department of Transportation. Since then, some council members have warned that dramatic wage hikes will lead to a decline in overall hotels, leading to lower tax revenues.
“We are moving forward with wages and healthcare costs rising by 50% while the entire tourism economy is underwater,” said Traci Park, the only committee member to vote against the wage hike on Tuesday. “And that has a direct impact on our sales tax, our business tax, us. [hotel] Taxes and everything else that is affecting our city’s budget. ”
Over the past few months, the Council’s Budget Committee has heard an increasingly depressing assessment of the city’s tourism and aviation industries. City manager Matt Sabo, a high-level budget officer, warned the committee last week that flight bookings to the US from major European cities have dropped double digits this year.
Szabo said bookings from Canada have been worsened, falling more than 70% this year, citing numbers from aviation data provider OAG.
“Nowhere is we seeing the impact of federal policies more quickly than tourism,” he said.
Shortly after taking office, Trump struck Canada and Mexico with sudden tariffs. Even after he announced a 90-day hiatus in the trade war, some of it remained intact. Canadians were furious at Trump’s threat to annex their country, boycotted American products and began canceling trips to the US, including popular winter destinations such as Palm Springs.
On Monday, the Budget Committee heard from John Ackerman, a top executive at Los Angeles World Airport, who reported that LAX’s concession projects are experiencing significant financial distress.
“If they can’t succeed, I think it’s difficult to replace them with someone miraculously trying to do better,” Ackerman told the committee. “So it can put us in important dangers. In the long run, there’s a good chance that airlines will have fewer flights and fewer revenues, which will be a bit of a downward spiral.”
Gov. Gavin Newsom announced Monday that California Visit, a tourism marketing nonprofit, is forecasting a 1% decline in state visitors this year, forecasting its first decline since the pandemic. Much of this is driven by a projected decline in international visits by 9.2%, the agency said.
Tourism groups were largely attributed to “weakening consumer sentiment” and cutting down the strong US dollar, which would become more expensive for tourists in other countries.
Elisa Valencia, who works for the airline’s catering company Flying Food Group, said the $20.76 hour wage is not enough to provide three children in Michoacán, Mexico. Valencia, 34, rejected the idea that the travel industry turmoil was a reason to deny workers wage promotion.
“Taxes affect not only businesses, but everyone,” she said. “Buying food and gas every day is becoming more expensive.”
Times staff writer Sundrac Donald contributed to this report.
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