CHICAGO, May 27, 2025 — Hospitality employers are pushing back hard on Los Angeles’ plan to raise the minimum wage for some hotel and restaurant workers to $30 an hour, or what is likely the highest mandated rate in the nation.
Eight hotels clustered around Los Angeles International Airport (LAX) threatened this weekend to pull out of an agreement to reduce room rates while the city is hosting the 2028 Olympics and Paralympics. The properties indicated through a local trade association that they could not afford to discount rooms and simultaneously pay workers at the new hourly rate.
They pointed out that occupancies this year have been essentially flat while costs have skyrocketed, already putting a squeeze on margins.
The wage hike also affects restaurants within the airport, one of the busiest in the world. As approved Friday, the new ordinance calls for raising the minimum pay for the targeted workers to $22.50 an hour on July 1, with additional increases of $2.50 per hour every July thereafter for the next three years. The plan would lift the pay floor to $30 by the time the Olympics begin.
In addition, employers would be required to increase their contributions to employees’ healthcare expenses to $8.35 an hour.
Hotels in and around LAX are currently required to pay workers at least $20.32. Airport workers earn a minimum of $19.28 per hour.
Only hotel workers at properties with at least 60 rooms would be affected.
Insiders privy to the wage negotiations say organized-labor leaders had pushed for an increase to $25 an hour. But lawmakers argued that hourly workers should share in the financial benefits of bringing the Olympics to town, and pushed up the mandated rate to $30.
The Airport Restaurant and Retail Association has described the LAX wage hike as “a bridge too far,” but noted that the hospitality components of other airports have also been hit with significant increases. Concessionaires at Washington state’s Sea-Tac International Airport, for instance, had their minimum hourly payments raised to $19.71, or 21% more than employers elsewhere in the state are required to pay.
Airport dining facilities say they already pay a significant premium over what a streetside employer offers because of peculiarities to the job. Transportation is often a challenge because of where airports are located relative to a city’s major residential areas, and security clearances add a significant complication.
The affected LAX hotels had agreed to extend blocs of rooms at moderate rates to sponsors, officials, members of the media and other VIPs. The Olympics are expected to be a major financial boon to the city.
Los Angeles and much of southern California have been hurt economically this year by wildfires, a drop in incoming shipments to local ports and the decline in tourism.
Airport, civic and labor officials have yet to respond publicly to the eight hotels’ indication that they could pull out of the room-price and wage agreement.
As Managing Editor for IFMA The Food Away from Home Association, Romeo is responsible for generating the group's news and feature content. He brings more than 40 years of experience in covering restaurants to the position.
Cover image courtesy: Closed Loop Project