By Hannah Psalma Ramirez,Hannah Psalma Ramirez • Special to Times of San Diego

Copyright timesofsandiego

The San Diego County Lodging Association’s (SDCLA) annual luncheon on Thursday drew in hotel owners ready to learn about the challenges and opportunities of the next summer season.

Among them – the city’s recent wage hike.

“We saw just this last week the city of San Diego’s decision to raise the minimum wage for hospitality, event center and amusement park workers to $25 an hour over the next four years,” noted Robert Gleason, chair for the SDCLA and CEO of Evans Hotels, as part of the opening remarks for the event.

“The government certainly doesn’t have ideas on how they think they can help us run our business better,” Gleason added, raking in laughter from the audience at the luncheon, held at ​​the Hyatt Regency La Jolla at Aventine.

The proposal, meant to benefit hospitality workers struggling with the high cost of living, has led to continuous critiques from some business owners who argue the move will lead to higher operating costs.

According to Fred Tayco, executive director for the lodging association, the number one question submitted in a survey ahead of the event was how the new minimum wage will impact the hotel economy.

In a presentation shared by the San Diego Tourism Authority, San Diego remains among the nation’s top markets as of July. But the summer slowdown, along with other national factors, could cause a downturn, warned event speakers.

While the U.S. prepares for a “mega decade of events,” including the 2026 World Cup and 2028 Summer Olympics in Los Angeles, current tensions and changes to visa fees have the potential to continue an international travel slump.

Last month, travel research firm Tourism Economics found that international air bookings are ringing in 10% to 14% below last year’s for August through October.

According to a forecast from Lodging Analytics Research & Consulting, San Diego’s gross metropolitan product (GMP) is expected to slightly outperform the national average in 2025, but then proceed to slightly underperform.

“Credit card balances are very high. Consumer sentiment is declining significantly,” said Mark Lukens, managing director for LW Hospitality Advisors, citing the effect of rising unemployment as another pressure on the industry, “A lot of Americans, particularly on the lower end of the spectrum, are reining in their spending.”

Robert Rauch, CEO of R.A. Rauch & Associates Inc, shared news at the event of 10 hotels expected to open in San Diego between October and May 2027. But resistance from community members, environmental regulations and high construction costs have slowed efforts to bolster supply.

“We’re at a critical moment,” he said in a SDCLA press release, “San Diego competes with destinations across the United States and abroad. If policies push our costs out of line, we risk losing conventions, sports tournaments and leisure travelers that drive so much of our economy.”