Rainmaker Blog Rising Minimum Wage and the Importance of Expense and Resource Management

In July, the U.S. House of Representatives passed an amended version of the Raise the Wage Act of 2019, which would raise the federal minimum wage from $7.25 to $15 by 2024. Hotel & Leisure Advisors indicate that this 100+ percent minimum-wage increase could potentially raise a typical full-service hotel’s payroll expense by 50 percent. Labor costs represent one of the most expensive line items in a property’s budget, with CBRE’s 2018 Trends® in the Hotel Industry report revealing that total labor costs and related expenses currently make up about 43 percent of all hotel expenses.