Pebblebrook Hotel Trust CEO Critiques LA’s $30 Wage Mandate Amid Industry Backlash
- Jon Bortz, CEO of Pebblebrook Hotel Trust, warns the wage increase could deter potential buyers and impact hotel operations.
- The Los Angeles wage mandate raises concerns about the financial sustainability of hotels amid a recovering tourism market.
- Pebblebrook Hotel Trust operates two hotels in Los Angeles, affected by the impending wage hikes and industry backlash.
Los Angeles Hotel Wage Mandate Sparks Industry Backlash
The recent municipal ordinance in Los Angeles requiring hotel operators to raise the minimum wage to $30 per hour by 2028 ignites significant concern within the hospitality industry. The American Hotel and Lodging Association (AHLA) actively opposes this mandate, fearing it could jeopardize profitability and local employment. Mark Beccaria, a partner at Hotel Angeleno, voices apprehension that the mandated wage increase—implemented in annual increments of $2.50—will severely impact the financial viability of hotels, especially as the sector anticipates a rebound in tourism due to high-profile events like the Olympics and FIFA World Cup. Beccaria has even halted a planned $10 million renovation project as a direct consequence of the impending wage hikes, illustrating the immediate financial repercussions hotel operators face.
Jon Bortz, CEO of Pebblebrook Hotel Trust, which owns nine hotels including two in Los Angeles, echoes these concerns. He notes that the current market conditions, exacerbated by the wage increase, deter potential buyers from entering the market. The decision to implement such a significant wage increase amidst a recovering tourism landscape raises questions about the sustainability of hotel operations and the long-term consequences for the workforce. The ordinance, supported by the city council, seems to overlook the challenges that hotel operators face in maintaining their businesses during a crucial recovery period.
In response to the wage hike, the AHLA has initiated a petition to repeal the ordinance, which has successfully gathered over 140,000 signatures—well above the 93,000 required to place the matter on the 2026 state ballot. This substantial support highlights the collective discontent within the hotel industry regarding the city council's decision, especially given the lack of thorough consultations prior to the ordinance's passage. As the petition process unfolds, the future of the hospitality sector in Los Angeles hangs in the balance, with many operators questioning the viability of maintaining a robust workforce under increasing financial strain.
The ordinance's implications extend beyond immediate labor costs, raising concerns about the overall health of the hospitality market in Los Angeles. With tourism on the horizon, stakeholders in the hotel industry remain vigilant, keenly observing how these developments might reshape their operations and influence the city's attractiveness as a prime destination for travelers.