Plans for the Los Angeles Olympics have hit another roadblock with a dispute between city officials and the hospitality industry threatening the organisation’s guarantee to provide a minimum of 40,000 hotel rooms that the International Olympic Committee requires to host spectators.
The Los Angeles City Council gave final approval to updates to the city’s Living Wage and Hotel Workers Minimum Wage ordinance last week, which will impact hotels with more than 60 rooms, and private companies at Los Angeles International Airport, including airlines and concessions.
At least eight hotels are threatening to withdraw their agreements to provide discounted rooms for Olympic fans over the city ordinance that will significantly boost the minimum wage for hotel and airport workers. In December 2024, the Los Angeles City Council approved an ordinance to incrementally raise the hourly wage from $20.32 (€17,87) to $30 (€26,39), taking effect from 1 July 2028.
Additionally, the changes include a mandated healthcare payment of $8.35 (€7,34) per hour. It also enforces training requirements, stating that employers must provide six hours of paid training annually to each employee, covering safety, worker rights, harassment, discrimination and other topics.
The ordinance was first proposed in 2023, with workers in the city’s tourism industry raising alarms about the cost of living in Los Angeles. Fuelled by concerns that the Olympics will drive up housing costs even more, supporters said increased pay is necessary to keep workers from being priced out of the city.
Hoteliers have expressed strong opposition to the wage hike. Sun Hill Properties Inc. warned the council ahead of the vote that, should it be approved without significant changes, they ‘absolutely will be pulling out of the room block for the Olympics’. Hilton, Hotel Angeleno, Hotel Per La and Hollywood Roosevelt argue that the increased labour costs are financially unfeasible.
“Common sense says you cannot raise wages over 30% in less than a year when revenue is flat,” argued Mark Beccaria of Hotel Angeleno, according to Yahoo. If this increase in labour costs passes, we will be forced by the city to consider converting this hotel in the heart of residential Brentwood into a homeless shelter.”
The increased labour costs may lead to higher hotel room rates, which could deter visitors and impact the Games. Some furthered that the new wage requirements will cost the city more than they will benefit from it.
