LA hotels slash jobs, staff hours as Karen Bass' $30 minimum wage hike drives up costs

Hotels in Los Angeles are facing mounting financial pressure as a new minimum wage law drives up labor costs, forcing operators to cut hours, reduce staff, and reconsider future investments. Under a law signed by Mayor Karen Bass, hotel and airport workers are set to receive annual wage increases of $2.50 until reaching $30 per hour by 2028, a mandate that researchers say is outpacing the industry’s ability to absorb costs. A new report from the American Hotel & Lodging Association (AHLA) highlights the city’s aggressive wage policy as a key factor behind the industry’s growing instability.

“Hotels are struggling to keep up with rising operating costs coupled with falling demand,” AHLA researchers said, pointing to the wage policy as a major driver of those costs. Unlike other expenses, the report argues, the mandated wage increases are “untethered” from hotel performance metrics like occupancy or seasonal demand. This means a hotel operating below capacity must still meet the same wage requirements as a fully booked property, limiting flexibility in an already volatile market.