LA's $30 Wage Law Threatens Hotel Owners

Hotel Industry in Los Angeles Faces Crisis

Hotel owners in Los Angeles are facing an unprecedented crisis, with many considering exiting the market entirely. The primary reasons cited are the rising minimum wage and a lack of buyers for their properties. This situation has left many hotel operators scrambling to find solutions or escape the financial burden.

Jon Bortz, CEO of Pebblebrook Hotel Trust, which owns eight hotels in Los Angeles, is one of those who want out. "We sold one last year — we would love to sell more of our hotels. I’ve stated that publicly in Los Angeles," Bortz told The California Post. However, he emphasized that there are no buyers in sight.

Other hotel owners share similar concerns. One unnamed owner expressed a desire to leave the state if possible, but the lack of interest from potential buyers has made it impossible. A recent City Hall initiative to increase the minimum wage to $30-an-hour for hotel workers has been described as the "final nail in the coffin" for many in the industry.

The ordinance, passed in May, gradually raises the minimum wage over the next several years, reaching $30 by 2028 for non-union hotels with 60 or more rooms. Bortz pointed out that this wage hike, combined with other regulations like the hotel worker protection ordinance, has severely impacted the industry.

"In 2016 we valued our portfolio — then it was nine properties — we valued it at $1.5 billion, today we would value it at $500 million," Bortz said. "So, we’ve lost a billion dollars in ten years."

To manage the increased labor costs, hotel owners have had to make tough decisions. "We laid off our host and an assistant manager from the restaurant," he explained. "I am now looking at eliminating valet parking." Bortz also mentioned that he will need to reduce labor by about 5% per year for the next three to four years.

Some hotel owners have turned to technology to offset rising labor costs. A hotel owner revealed that they have accelerated the use of artificial intelligence, including robotic cleaners, robotic delivery, and AI for customer relations.

Dr. Jackie Filla, CEO of the Hotel Association of Los Angeles (HALA), warned that things could get worse when the minimum wage hits $30-per-hour in 2028. "We’re very concerned that there are hotels that won’t make it," Filla said, urging lawmakers to reconsider the ordinance.

The HALA conducted a report in February that highlighted the potential consequences of the minimum wage ordinance, including layoffs, reduced services, and closures. "Our report identifies several hotels that are on the public loan watch list, meaning that they’re in default of their loans. Several other hotels are up for sale, well below prices that many of them paid decades ago for the hotels," Filla said.

This trend is already evident. After undergoing over $70 million in improvements and being valued at $88 million, the iconic Hilton Checkers Hotel sold for just $12.5 million on January 29, 2026.

Bortz criticized the policy, stating, "Who wants to buy into a market where they dictate an unreasonable level of compensation, operating costs, workload limits, and operating standards that have absolutely nothing to do with safety and don’t have anything to do with good health. It’s purely so that properties that are not union are so expensive that we go to the union and say we give up."

Hotel owners have attempted to engage with city leaders, but these efforts have not yielded results. If changes are not made soon, the hospitality landscape in Los Angeles may look significantly different.

"If you don’t make any money, you can’t invest in your hotels — you can’t maintain them," Bortz said. "The hotels will be open, but they’re not going to be in good condition. People aren’t gonna have a great experience over the Olympics."