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Extreme Wages Will Only Hurt Hotels

Los Angeles Hotel

Yesterday at New York University's annual hospitality conference in NYC, we snapped AH&LA CEO Katherine Lugar and Penn State School of Hospitality Management director Dr. John O'Neill, who released a joint study by AH&LA and the Asian American Hotel Owners Association on the impacts of extreme local wage initiatives. They're popping up all over the US, Katherine says, like LA's proposal to up the local wage for hotel workers to $15.37/hour. The study found that in order for hotels to make up for that lost revenue ($106M in lost annual guest room revenue, $16.4M in lost occupancy taxes, $2.9M in lower corporate taxes, and losing $20.1M in hotel values), nearly 1,400 hotel staff jobs here would need to be cut. These measures threaten an industry that "embodies the American dream... CEOs have worked their way up from entry-level positions," she says.