News Summary
Los Angeles is currently dealing with significant economic challenges as it recovers from January’s wildfires, which caused extensive damage and disrupted the economy. The city sees a small rise in hotel occupancy, yet faces a downturn in visitor numbers and a declining corporate travel market. A newly enacted wage ordinance also raises concerns about job losses and reduced tax revenue. As the city prepares for major events, the hospitality sector continues to grapple with various obstacles affecting its growth and recovery.
Los Angeles is grappling with significant economic challenges as it attempts to recover from the devastating wildfires that struck in January, which not only caused considerable damage but also resulted in loss of life and significant economic disruption. The city’s recovery efforts are hindered by a downturn in visitor numbers attributed to ongoing macroeconomic concerns and slow international demand.
Despite a slight year-to-date increase in hotel occupancy and average daily rates, the hospitality sector is facing mounting challenges. The Los Angeles Tourism Marketing District reported a minor increase in hotel occupancy of 0.5%, bringing it to 72.5%, along with a 0.6% rise in the average daily rate to $206. However, the revenue per available room in Los Angeles has dropped by over 9% year-over-year during several weeks in July. Notably, the central business district has seen revenue declines of up to 30%. Meanwhile, international traveler numbers arriving at Los Angeles International Airport (LAX) have declined by 5.6% compared to 2024, further exacerbating the situation.
Another critical factor impacting the hospitality industry is a new wage ordinance passed in May. This ordinance mandates that the minimum wage for airport and hotel workers be raised to $22.50 by 2025 and to $30 by 2028. The hotel sector has raised alarms about the ordinance, indicating it could potentially jeopardize jobs, lead to hotel closures, and reduce the tax revenue the city depends on. Early forecasts from the American Hotel & Lodging Association suggested that the implementation of this ordinance could result in the loss of 14,000 jobs and a decline of $169 million in hotel industry revenue.
These economic concerns come as Los Angeles prepares to host high-profile events such as the 2026 FIFA World Cup, Super Bowl LXI, and the 2028 Summer Olympics. In anticipation of such events, the city recently approved plans to expand the Los Angeles Convention Center, with construction expected to be completed by March 2028. Additionally, new establishments in the hotel sector include the recently opened 132-room Whisky Hotel in Hollywood and the renovated 614-room Sonesta Los Angeles Airport LAX. Planned hotel openings also include the 212-room Jordan San Gabriel set for January 2026 and the 300-room Kali Hotel anticipated to open in September 2026, adjacent to SoFi Stadium.
Despite these developments, there is growing concern that the new wage ordinance may dissuade developers from pursuing new projects in Los Angeles, which would further hinder economic growth. The decline in hotel rates booked by corporations in Los Angeles also illustrates the struggles of the industry; hotel rates for corporate bookings averaged $245 in Q2 2025, down from $254 in Q1 2025. This downward trend in corporate travel suggests a broader struggle for the hospitality sector amid recovering economic conditions.
The current situation in Los Angeles reflects a prevalent trend in the hospitality and tourism industries, with increased activity and anticipation indicating that the business and leisure travel sectors are beginning to rebound after a sluggish start to the year. However, the city continues to face substantial headwinds that threaten its recovery and growth in the coming years.
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Additional Resources
- Business Travel News: CTI Spotlight – Los Angeles
- Los Angeles Times: United Airlines CEO on LAX Expansion
- Arizona Digital Free Press: Waymo Launches Corporate Robotaxi Accounts
- Business Traveller: Business Travel on Marco Island
- American Express: Things to Do in Los Angeles Itinerary
- Wikipedia: Los Angeles
- Google Search: Los Angeles economic challenges
Author: STAFF HERE LOS ANGELES WRITER
LOS ANGELES STAFF WRITER The LOS ANGELES STAFF WRITER represents the experienced team at HERELosAngeles.com, your go-to source for actionable local news and information in Los Angeles, Los Angeles County, and beyond, specializing in "news you can use" with coverage of product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise from years of dedicated reporting and strong community input, including local press releases and business updates, while delivering top reporting on high-value events like the Academy Awards, LA Auto Show, and Los Angeles Marathon, extending coverage to key organizations such as the Los Angeles Area Chamber of Commerce and the Los Angeles Tourism & Convention Board, plus leading businesses in entertainment and technology like Warner Bros. and SpaceX, and as part of the broader HERE network including HEREAnaheim.com , HERECostaMesa.com , HEREHuntingtonBeach.com , and HERESantaAna.com , providing comprehensive, credible insights into Southern California's dynamic landscape. HERE Anaheim HERE Beverly Hills HERE Coronado HERE Costa Mesa HERE Hollywood HERE Huntington Beach HERE Long Beach HERE Los Angeles HERE Mission Viejo HERE San Diego HERE Santa Ana
