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Los Angeles Tourism Struggles to Recover Post-Pandemic, According to AHLA Report – Image Credit AHLA
Los Angeles’ tourism industry recovery lags behind all other major U.S. cities post-pandemic, with wildfires and potential legislation exacerbating the situation.
Despite efforts to bounce back from the COVID-19 pandemic and recent wildfires, Los Angeles’ tourism industry faces major challenges. According to a new report by the American Hotel & Lodging Association (AHLA), Los Angeles’ recovery rate is significantly lower than that of other major U.S. cities. This slow recovery has been compounded by potential legislation that could worsen the city’s tourism industry’s plight.
Tourism is a major driver of Los Angeles’ economy, employing over 540,000 residents and generating significant revenue. In 2023, the industry contributed more than $40 billion to local business sales and $290 million in Transient Occupancy Tax (TOT) revenue. However, the city saw a $14.3 million TOT budget shortfall in the fiscal year 2023-2024, with the fiscal year 2024-2025 already recording a $13.9 million shortfall at mid-year.
The AHLA report underscores that Los Angeles’ recovery rate in attracting international visitors from 2019 levels is the lowest among all major U.S. cities. International tourists account for 23% of overnight stays in the city but contribute more than 49% of overnight visitor spending.
As Los Angeles prepares to host the 2026 World Cup and the 2028 Olympics, the city council’s proposed new hotel operational restrictions could hinder the tourism industry’s recovery and lead to increased TOT shortfalls.
AHLA President & CEO Rosanna Maietta expressed concern over the proposed measures, stating they threaten small businesses and the hospitality industry. Maietta urged the city to delay further consideration of the legislation and partner with the industry to bolster job creation and prepare for the influx of visitors expected for the upcoming major sporting events.
The report also highlighted the growing costs of labor, which account for approximately 50% of a hotel’s total expenses and have consistently outpaced revenue growth since 2020. Legislation such as the Worker Minimum Wage Ordinance is expected to strain the city’s economy further, leading to the loss of nearly 15,000 hotel jobs, a reduction of $169 million in state and local tax revenue, and discouraging $342 million in hotel construction spending.
