By David Zahniser
and Suhauna Hussain
May 13, 2025 3 AM PT
Perched high above the Cahuenga Pass, the 24-story Hilton Los Angeles Universal City Hotel is positioned to be a prime gathering spot for visitors arriving for the 2028 Summer Olympic and Paralympic Games.
Sun Hill Properties Inc., which manages the 495-room hotel, has already signed a “room block” agreement with the LA28 organizing committee, reserving hundreds of rooms for Olympics fans. The City Council recently approved a plan to let the Hilton add a second, 18-story tower, which would open just in time for the Olympics.
Now, the future of the $250-million expansion is in doubt. On Wednesday, the Los Angeles City Council is set to vote on a requirement that hotels with 60 or more rooms pay their workers at least $30 per hour by 2028, along with a new $8.35 per hour healthcare payment.
If the council approves the proposal without significant changes, Sun Hill “absolutely will be pulling out of the room block for the Olympics,” said Mark Davis, the company’s president and chief executive. The hotel’s investors will also kill the 395-room expansion, he said.
“Our board was very adamant that if [council members] go forward with this nonsense, that it’s dead,” Davis said. “They’re going to move the project somewhere else.”
The council voted 12-3 last year to instruct City Atty. Hydee Feldstein Soto to draft the package of minimum wage hikes, which would apply not just to hotels but also private companies at Los Angeles International Airport, such as airlines and concessions. The minimum wage would be the highest in the country, according to Unite Here Local 11, the hotel and restaurant workers union, which has championed the proposal.
Backers of the higher wage say L.A.’s tourism workers are struggling to pay for food and rent, and deserve to benefit financially from the Olympics just as much as private corporations. They dismiss the hospitality industry’s dire warnings, including the notion that increased wages will scuttle the development of new hotels.
City Councilmember Hugo Soto-Martínez said the Sheraton Universal Hotel, a nearby competitor of the Hilton, has already been paying a higher wage to its unionized workforce. The real threat to the development of new hotels, he said, is higher interest rates and the economic uncertainty surrounding President Trump’s trade policies.
“So, I just don’t buy it,” said Soto-Martínez, a former hotel union organizer, as he referred to Davis’ warning.
Under the city’s proposal, the hotel and airport minimum wage would reach $22.50 on July 1. It would jump to $25 in July 2026, $27.50 in July 2027 and $30 in July 2028. On top of those increases, the $8.35 per hour healthcare payment would go into effect on Jan. 1.
Business groups point out that two hotels have closed in the past year — Four Points by Sheraton next to LAX and Mama Shelter in Hollywood, for a loss of 270 jobs. They say Trump’s trade wars are driving down tourist activity from other nations, with visitors from Canada especially lagging.
Once the increases are in effect, business leaders say, hotels with on-site dining won’t be able to compete with non-hotel restaurants, which will have a much lower minimum wage.
California
May 7, 2025
L.A.’s political leaders have enacted a number of wage laws over the last few decades. The hotel minimum wage, approved by the council in 2014, is currently $20.32 per hour. The minimum wage for private-sector employees at LAX is $25.23 per hour, once the required $5.95 hourly healthcare payment is included. Then there’s the minimum wage for nearly everyone else in L.A., which is $17.28 per hour — 78 cents higher than the state’s.
The hourly minimum wage for hotel and airport workers was already slated to go up this year, as part of regularly scheduled increases in the city’s wage laws. Once the council showed interest in the much larger increases, business leaders began warning that hotel developers would take their business elsewhere.
Few were as dramatic as Davis, who told council members that their proposal, as drafted, would “likely kill” the Universal City Hilton’s 395-room expansion.
Davis, whose company has hotels in Simi Valley, Colorado Springs, Colo., and the greater Denver area, said his board instructed him last year to look at acquiring property outside of California, in markets that “make more sense financially for an investment of $250 million.”
“The owners investing this money, they have to look at the numbers,” he said in an interview. “Any project survives only by its numbers.”
The Universal City Hilton already pays most of its workers more than $25 per hour, while also offering healthcare coverage, Davis said. If those health plans have a financial value lower than the $8.35 per hour, the company will need to make up the difference, he said.
Davis said he, too, is looking at scaling back restaurant operations, which would likely require layoffs.
At one point, Davis’ project drew support from the city’s political leaders.
The Universal City Hilton reached an agreement early on with construction trade unions, promising to pay a higher prevailing wage to the estimated 1,000 construction workers who would work on the new tower.
In August, the council voted unanimously to seek an economic analysis that would determine whether the city should provide taxpayer assistance to the project. The analysis, requested by Councilmembers Nithya Raman and Soto-Martínez, would have explored whether to allow the hotel to keep a share of the tax revenues generated by the new tower.
Raman, whose district includes a portion of Universal City, did not respond to questions from The Times about the project — or the potential impact of the higher tourism wage.
In recent days, the Hotel Assn. of Los Angeles has been appealing directly to Mayor Karen Bass, purchasing digital ads that ask her to intervene on the minimum wage issue.
Bass, in an interview earlier this year, said she wants hotel workers to “make a decent living” while also ensuring that their employers “are able to survive.”
“We have to make sure that we can address both — that we can address the needs of the workers without crippling the industry,” she said.