The wage increase in Seattle contains a very troubling anti-franchise provision not previously employed anywhere else in the country, and that means small hotels and businesses will suffer as a result, according to American Hotel & Lodging Association CEO Katherine Lugar. We snapped her last week with Penn State School of Hospitality Management director Dr. John O'Neill at New York University's annual hospitality conference, where they released a joint study by AH&LA and the Asian American Hotel Owners Association on the impacts of extreme local wage initiatives. These wage initiatives threaten an industry that "embodies the American dream... CEOs have worked their way up from entry-level positions," she says.
They're popping up all over the US, Katherine says. For one, Los Angeles is proposing upping 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 guest room revenue, $16.4M in occupancy taxes, $2.9M in corporate taxes, and $20.1M in hotel values), nearly 1,400 hotel staff jobs there would need to be cut there. In Seattle, she says it's absurd to think that mom-and-pop hotels making up the vast majority of the industry would be considered large employers under Seattle’s new provisions, just because of their affiliation with national chains. In turn, AH&LA is supporting the efforts of the International Franchise Association to file a legal challenge to overturn the franchisee provision in the ordinance.
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