Los Angeles, Calif. (April 9, 2026) – The American Hotel & Lodging Association (AHLA) today released a report showcasing the vital role hotels play in Los Angeles’ economy while raising concerns about the hospitality industry’s ability to sustain jobs, investment, and tax revenue amid the impact of recent city council policies and rising operational costs.

Hotels are central to LA’s economic strength, but restrictive policies are preventing the city from increasing hotel employment and tax revenue. The report finds that hotels across Los Angeles are facing increasing financial and operational pressure as rising labor and operating costs outpace revenue growth, noting that development is slowing, investment is shifting to other markets, hotels are layoff staff and reducing hours and some hotels have closed or delayed expansion plans.

Los Angeles hotel stakeholders' detail widespread concern about the city’s investment climate, according to the new report:

• 97% say repealing recent labor regulations will make LA a more attractive market.
• 88% say they have reduced staffing or hours in the past year as a result of city council policies.
• 80% say LA is not a good place for long-term hotel investment.
• 0% say LA’s hotel investment environment is very favorable.

“Los Angeles is not hospitable to the hospitality industry. Hotels are a major economic engine for Los Angeles – creating jobs, supporting small businesses, and raising critical tax revenue for local services,” said Rosanna Maietta, President & CEO of AHLA. “But the current policy environment is making it increasingly difficult for hotels to operate, invest, and create more jobs in the city. Unless there is a greater willingness to support the business community and ensure a thriving hotel industry, many more jobs will be lost and many more businesses will close, causing a significant ripple effect across the community.”

AHLA is concerned that recent policies passed by the Los Angeles City Council – including significant wage mandates and restrictive operational requirements – are increasing costs without flexibility to reflect market conditions and demand levels. The LA hospitality market has never fully recovered to its pre-pandemic peak of 84% occupancy and the 2.8 million monthly room nights in demand. The report finds these policies are contributing to reduced hiring and fewer hours for workers, delayed or canceled hotel investment and development, and reduced airline operations and restaurant closures.

Impacts of Reduced Investment

As Los Angeles prepares for the 2026 FIFA World Cup and 2028 Summer Olympics, hotels are struggling to keep up with rising operating costs coupled with falling demand. 

• 86% of Los Angeles hotel owners and operators rank rising labor costs as the top challenge. 

• In the last year, 88% of hotels have undergone layoffs or hour reductions for workforce, 59% have reduced overtime availability, and 59% have closed or limited employee benefits or amenities. 

• Hotel properties attribute these staffing changes to many factors, including increased labor costs (93%), increased operating costs (91%), reduced demand and room cancellations (58%), and the broader economic environment (55%).

Call to Amend Policies and Support Industry Stability

AHLA is calling on the City Council to revisit and amend policies that are contributing to rising costs and declining investment, and to work collaboratively with industry stakeholders on solutions that support both workers and long-term economic growth.

“We share the City’s goal of supporting workers and strong communities,” added Maietta. “But policies must also reflect economic realities. We urge the City Council to revisit and amend these measures to ensure hotels remain viable and continue contributing to Los Angeles’ economy.”

According to the report, Los Angeles hotels generate $12.5 billion in annual economic activity, support nearly 64,000 jobs, and produce more than $1.1 billion in state and local tax revenue that funds essential public services. The economic impact data, commissioned in partnership with Oxford Economics, reveals hotel guest spending in the city tops $7.2 billion, driving business for local restaurants, retailors, and arts and entertainment venues.

View the full report here.

About AHLA

The American Hotel & Lodging Association (AHLA) is the largest hotel association in America, representing more than 30,000 members from all segments of the industry nationwide – including iconic global brands, 80 percent of all franchised hotels, and the 16 largest hotel companies in the U.S. Headquartered in Washington, D.C., AHLA focuses on strategic advocacy, communications support, and workforce development programs to move the industry forward. Learn more at www.ahla.com.