The Los Angeles City Council approved a ballot measure Tuesday that will ask voters to increase the city’s hotel tax by 2% before millions of tourists visit for the 2028 Olympic Games.
The move would boost Los Angeles’ transient-occupancy tax from 14% to 16% through 2028 and then set it permanently at 15% in 2029.
If approved by voters, the tax increase would bring in an additional $44 million annually before the Olympics and $22 million afterward, according to city estimates.
“I do think that there is a logic that we can explain to the electorate, and to ourselves, that the Olympics create an opportunity to add some jet fuel to our visitor-serving community,” said Councilmember Tim McOsker, who voted in favor of the increase.
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The council voted 13-2 in favor of putting the measure on the June ballot. Councilmembers Monica Rodriguez and John Lee voted no.
Lee told LAist he thinks it’s the wrong time to make it harder for hotels to do business in Los Angeles.
“The hospitality sector is already navigating significant pressures, and increasing the tax would only make it more difficult,” he said.
Rodriguez said she worried about any city policy that might discourage tourists from staying in hotels and instead choose short-term rental properties in private homes.
“To be able to have access to that residential housing stock, we need to create some disincentive for the expansion of short-term rentals,” Rodriguez said.
The council considered a larger hotel tax increase — a temporary 4% and permanent 2% bump — but voted it down.
On Tuesday, several representatives from hotel industry and pro-business groups spoke against raising the transient-occupancy tax.
“While these events will be temporary, any tax increase would be permanent, further undermining the city's ability to compete for budget, budget-conscious conventions and family travelers,” Jackie Filla, president and CEO of the Hotel Association of Los Angeles said.
Nearby cities have varying hotel tax rates. Burbank’s transient-occupancy tax is at 10%, Glendale and Pasadena’s 12% and Long Beach’s 13%. Santa Monica and West Hollywood’s hotel tax rates are more than 15%.
James Finney-Conlon with the L.A. Area Chamber of Commerce said L.A. could lose out.
“We are concerned these taxes will fall onto potential tourists who are looking to come to our great city and discourage them from visiting the city of L.A. and contributing to our economy,” he said.
Councilmembers also approved a separate ballot measure to close what they say is a tax loophole exploited by online travel agencies and platforms.
If voters approve that measure, those companies would be responsible for collecting the transient occupancy tax on the full amount they charge customers, including booking and service fees, not just the discounted rate they pay hotels.
The L.A. City Administrative Officer estimates that change would generate an additional $5 million annually.
Both measures are expected to appear on L.A. city ballots in primary elections June 2.
The deadline to adopt final ballot language is Feb. 11.
