San Diego Hotel Workers to Receive $25 Minimum Wage — What Hoteliers Need to Know

City Council approves phased increase to $25/hour for many hospitality employees; hoteliers face a multiyear adjustment period and operational decisions ahead.

San Diego’s City Council has voted to raise the minimum wage for many hospitality workers to $25 per hour, a sector-specific ordinance that will be phased in over several years and affects large hotels, event venues and major attractions. The unanimous vote marks a significant regulatory change for hotels operating in one of California’s largest tourism markets. 

Who is covered and delivery timetable

The ordinance applies to employees at hotels with 150 or more rooms and to staff at large event centers, amusement parks and comparable tourism venues. The increase will be phased in beginning in 2026, with event center roles starting higher initially and hotel and amusement-park roles beginning at a lower step—culminating in a $25/hour floor by July 1, 2030. 

Industry reaction and fiscal concerns

Business groups and some operators warned the increase could materially raise payroll costs and spur changes in staffing models, automation, and pricing. The San Diego Regional Chamber of Commerce and local business representatives publicly urged caution during the debate, issuing analyses and statements about potential economic impacts. 

Why proponents pressed ahead

Advocates framed the ordinance as addressing San Diego’s cost-of-living realities: MIT’s living-wage estimates and local analyses were cited during council debate to show many hospitality roles fall short of local living expenses. Labor groups and worker advocates said the policy will reduce reliance on public assistance and improve retention in high-turnover departments such as housekeeping and food & beverage. 

Operational considerations for hoteliers

• Cost modelling: Operators should update labor forecasts and profit-and-loss scenarios now to understand the phased impacts on departmental margins.
• Staffing strategy: Higher base pay can reduce turnover, but it may require recalibrating overtime, scheduling, and tip/benefit structures.
• Revenue management: Evaluate whether rate positioning, group concessions and ancillary revenue can help offset higher payrolls without eroding competitiveness.
• Procurement & automation: Staggered implementation allows for time to pilot productivity gains, but automation choices should be weighed against the guest experience and brand positioning.

Bottom line

The San Diego hospitality minimum-wage ordinance represents a material, multi-year change for local hoteliers. With a phased rollout to 2030, the measure provides time to adapt operationally—but not to defer planning. Forward-looking operators will begin scenario planning immediately, engaging labor partners and finance teams to protect service standards while maintaining sustainable margins.