As Los Angeles City Council approved a minimum wage hike for hotel workers to an effective $38.35 per hour by the 2028 Summer Olympics, an owner at Hotel Angeleno, which sits just on the Brentwood side of the 405’s Sunset exit, warns the wage may force the hotel’s conversion into a homeless shelter.
Hotel Angeleno’s warning also brought attention to the high hotel room rates paid by the city for its “Inside Safe” program leasing hotels for use as homeless shelters.
Wages for employees at hotels with 60 or more rooms would rapidly rise from $20.32 per hour now, to $30 per hour in wages plus a cash-redeemable $8.35 per hour healthcare payment by summer 2028.
While wage hike proponents such as City Councilman Hugo Soto-Martinez say inflation has necessitated wage increases to maintain real wages, economic data suggests hotels are already underwater.
The city already lost 11,000 hotel jobs in 2024 as higher operating costs, combined with visitorship remaining well below prepandemic levels, took their toll.
In the first quarter of 2025, Los Angeles hotel occupancy averaged just 69.9% per night, including the boost from fire evacuations and home losses.
“The impact to Hotel Angeleno will be over $850,000 per year. Common sense says you cannot raise wages over 30% in less than a year when revenue is flat,” said Mark Beccaria, principal at Hotel Angeleno.
“If this increase in labor costs passes, we will be forced by the City to consider converting this hotel in the heart of residential Brentwood into a homeless shelter.”
Beccaria’s statement seemingly references the mayor’s signature “Inside Safe” program, which pays nightly room rates to lease entire hotels as homeless shelters.
For the LA Grand hotel in downtown Los Angeles, the city’s lease for the hotel’s 481 rooms at a rate of $154 per room per night through early 2024 appears to have been a major windfall compared to the local industry’s low occupancy rates.
According to industry-commissioned research, the effective $38.35 new wage could result in 14,870 lost jobs, a $1.1 billion decrease in tourism spending, and $55 million in lost municipal tax revenue as the city grapples with a nearly $1 billion budget shortfall.
