AHLA Warns NYC Budget Proposal Could Raise Hotel Costs, Threaten Jobs

The American Hotel & Lodging Association submitted testimony to the New York City Council’s Committee on Economic Development, warning that provisions in the city’s proposed FY27 budget could increase costs for hotels and threaten jobs across the city.

The American Hotel & Lodging Association (AHLA) has raised concerns that provisions in New York City’s proposed FY27 budget could increase costs for hotels and threaten jobs citywide. In testimony to the City Council’s Committee on Economic Development, AHLA urged policymakers to consider the cumulative impact of proposed tax increases and policy-driven costs on the hotel industry.

AHLA’s testimony addressed proposed changes to the corporate tax structure and the pass-through entity tax, stating that these changes could increase costs for hotel owners, including small business operators structured as partnerships or S corporations, as well as other small businesses supporting hotels. The association also cited a proposed 9.5 percent increase in the city’s Real Property Tax (RPT), saying this could further strain hotel finances as operating costs continue to rise.

According to data from Oxford Economics cited in the testimony, guests staying in New York City hotels spend approximately $38.4 billion annually across the five boroughs, supporting restaurants, retailers, cultural institutions, and small businesses. Each hotel room night generates an estimated $1,168 in visitor spending, contributing to a projected $4.9 billion in local, state, and federal tax revenue in 2026.

The hotel and lodging industry supports nearly 264,000 jobs in New York City, representing about 5 percent of the city’s workforce. Since the pandemic, average hotel wages have increased more than 15 percent faster than wages across the broader economy.

AHLA referenced ongoing cost pressures for hotel operators, including increases in labor, insurance, utilities, compliance, and construction expenses. Over the past five years, hotel operating costs have increased roughly four times as fast as revenue growth. Local policies such as the 2021 Hotel Permitting ordinance and the 2024 Safe Hotel Act have also contributed to higher operating costs, as has global economic uncertainty that has affected construction and renovation expenses.

The testimony highlighted a decline in international travel to New York City. In 2025, the New York City Tourism Office reported a five percent drop in international visitors. International travelers spend an average of $4,000 per trip, higher than domestic visitors, and declines in international visitation can significantly impact hotels and related businesses.

A copy of the testimony is available at the AHLA website.