The Los Angeles City Council voted Wednesday to approve a sweeping package of minimum wage increases for workers in the tourism industry, despite objections from business leaders who warned that the region is already facing a slowdown in international travel.
The proposal, billed by labor leaders as the highest minimum wage in the country, would require hotels with more than 60 rooms, as well as companies doing business at Los Angeles International Airport, to pay their workers $30 per hour by 2028.
Jessica Durrum, a policy director with the Los Angeles Alliance for a New Economy, a pro-union advocacy group, said business leaders also issued dire warnings about the economy when previous wage increases were approved — only to be proved wrong. Durrum, who is in charge of her group’s Tourism Workers Rising campaign, told the council that a higher wage would only benefit the region.
Tourism Industry = Hotel owners
Higher costs will cause fewer visitors, and there are far more affected by that than hotel owners. You can argue for or against the increase or this particular minimum, but don’t argue against the facts. If air travel gets more expensive, hotel owners are affected. If hotel prices go up, your operators, restaurants, transportation services, museums, and attractions will be affected.
If your staff relies on tips those “higher costs” you talk about already exist. It’s just invisible to the company.
Counterpoint, business owners will always charge what the market will support. If people will book $1000/night rooms, they’ll charge that whether they’re paying their workers $10/hr or $30/hr.
Counter-counterpoint, “what the market will support” has a lot hidden in it, including the interplay between what you charge and your occupancy rate and whether your competitors can pull business away from you with lower rates. Your expenses are important to your bottom line and impact that equation.
Counter-counter-counterpoint, people can’t go on vacations and stay in hotels when their wages are so low that a majority of the country is just one missed paycheck away from bankruptcy.
I made no argument about whether there should be a wage increase. I merely pointed out that there will be some impact and it will be across the whole tourism industry, not just hotels.
Thanks for the info in the other sub thread on labor costs. We’ll see what the prices do and how that impacts travel plans.
Part of the article mentions that visits are already down due to the economic climate, which is also a point you’re making.
Yes, let’s keep supressing wages because things will get more expensive…
Like they haven’t gotten more expensive without the wage increase.
Do you have any idea how small labor costs are compared to the other expenses associated with the operations of a hotel?
No. Please provide an estimate of the percent of the expenses which is labor.
According to the American Hotel & Lodging Associations’ 2016 State of the Industry report, the combined total of salaries, wages, contract labor, bonuses, and payroll administration is ~40% of total hotel operating costs.
Note that this figure also includes salaries, bonuses, and payroll administration. One could double the wages of hourly employees and the cost of a night’s stay would never increase more than 20%.
Just to add more detail, for hotels I’m familiar with the general manager makes $150-200k or more while front desk and housekeeping staff make about $12/hr.