The valet entrance at the Kimpton Hotel Palomar, in Beverly Hills, Calif., which has been struggling with declining profitability.

Hotel owners are in open revolt against Los Angeles’s new $30-an-hour minimum wage, the latest blow to one of the country’s poorest-performing lodging markets.

This was supposed to be a great time to own a hotel in L.A. The area will soon be at the center of the globe’s premier sporting events, first as a host city for eight World Cup soccer games next year, and then the Super Bowl the following year. In 2028, L.A. hosts the summer Olympics.

But a pullback in foreign visitors and other issues have caused the L.A. hotel business to stumble again this year.

Now, hotel owners have to contend with what local union leaders say will be the highest minimum wage in the country. The city council voted last month to boost the wage for workers in hotels with 60 rooms or more. Hourly pay, currently $20.32, will increase every year until it reaches $30 in 2028.

The industry is mounting an effort to roll back the new minimum-wage law. Los Angeles hotel owners are petitioning to suspend the city’s new ordinance, and several hotel owners have also threatened to pull out of agreements to provide blocks of rooms during the Olympic Games.

Some hoteliers say they were already eager to exit L.A., if only they could find an offramp.

“We would love to sell” our L.A. hotels, said Jon Bortz, chief executive of Pebblebrook Hotel Trust, which owns two hotels in the city and seven more in the L.A. area. “But nobody will buy them.”

Others say they are canceling renovation projects, closing or scaling back their hotels’ restaurants and could eliminate valet parking because of the increased labor costs.

Guests at the Kimpton Hotel Palomar’s reception desk.

The Kimpton Hotel Palomar’s pool area.

“The quality of the experience is going to go down,” Bortz said. “And that’s going to hurt tourism, and it’s going to leave L.A. in sort of an embarrassing situation when it comes to the World Cup and the Olympics.”

Now protests over federal immigration enforcement, which escalated when President Trump sent in the National Guard and U.S. Marines, are adding to the hotel market’s uncertainty. Nationally, hospitality trade groups have lobbied the Trump administration for temporary visas for hotel workers as the industry grapples with workforce shortages. The administration said earlier this month that it would pause immigration arrests at hotels, farms and restaurants, though it later said workplace raids would continue.

L.A. already has one of the slowest recoveries from the pandemic among the U.S.’s top 25 hotel markets, according to real-estate data firm CoStar Group.

After adjusting for inflation, revenue per available room, a key metric for the hotel industry, averaged more than 15% below prepandemic performance during the 12-month period ended in April.

The local hotel union, Unite Here Local 11, drove the effort to increase the wage. Representing 32,000 hospitality and other workers in Southern California and Arizona, it is one of the most powerful unions in the lodging business.

Kurt Petersen, the union’s co-president, said hotel owners can pay the higher wages, especially with next year’s FIFA World Cup and NBA All-Star games, the Super Bowl and the Olympics all expected to juice room demand.

“Of course they can afford it,” Petersen said. “Workers need to earn enough to be able to live in Los Angeles.”

The median rental cost for a two-bedroom apartment in Los Angeles is $2,383 a month, 72% higher than the nationwide median rent, according to listing website Apartment List. The union is gathering signatures for a voter referendum to boost the wages of all L.A. workers.

The lodging industry says it was already facing serious headwinds, including a decline in international tourism after reports of foreign visitors being detained or deported from the U.S.

A shift by budget-conscious travelers to short-term rentals and a 3% increase in hotel inventory since 2019 have also hurt, said Michael Stathokostopoulos, senior director of Hospitality Analytics at CoStar Group.

Even before the new minimum wage, the total average monthly cost of labor per occupied room this year at full-service hotels in the Los Angeles market had reached a record $250 as of April, Stathokostopoulos said. That is up 6% from a year earlier and is about 36% higher than the 2019 prepandemic benchmark of $184.

Hotel owners say they don’t think the major sporting events will provide enough additional revenue to offset higher labor costs. The World Cup games and Olympics will be held during Los Angeles’s peak summer season and would therefore provide only an incremental bump, said Mark Beccaria, who owns the boutique Hotel Angeleno.

Beccaria said he is putting on hold a $10 million planned renovation of his hotel, which he had hoped to complete before the Olympics, in part because of the minimum-wage increase.

“You’re going to have a lot of hotels in Los Angeles that will become run down,” he said.

Pebblebrook owns the W Los Angeles, not far from Rodeo Drive, and the Kimpton-branded Hotel Palomar. Both have been struggling with declining profitability since 2016.

Only these two of the company’s hotels are in Los Angeles proper and will be required to pay the minimum-wage increase. But CEO Bortz said he will likely feel compelled to boost wages at his seven other properties in the broader Los Angeles market to stay competitive for labor.

In fact, wages are already set to rise in nearby Long Beach, where voters approved a new minimum of $29.50 by 2028.

Los Angeles’s minimum-wage increase comes on top of a 2022 city ordinance that set strict limits on the amount of square footage that housekeepers may clean during their shifts and makes it prohibitively expensive for hotel owners to allow their employees to work overtime, Bortz said.

The American Hotel & Lodging Association, an industry trade group, is part of an effort to overturn the minimum-wage ordinance.

If the opponents collect 93,000 signatures by the end of the month, the wage-increase’s implementation will be paused for a year and the ordinance will go before Los Angeles voters in a referendum vote in June 2026.