Hotels & Motels NAICS 721110

Aug 21, 2025 - Online Travel Agency Settles High Profile Hotel Junk Fee Case

• A recent $9.5 million court settlement between online travel agency (OTA) umbrella company Bookings Holdings and the state of Texas demonstrates a willingness by regulators to crack down on junk fees in hotel bookings. Bookings, owner of OTA sites including Priceline.com and Kayak.com, was accused of hiding questionable costs like resort, amenity, and utility fees into a single, vague, “Taxes and Fees” line item. In addition to the monetary payment, Bookings has to disclose any added fees clearly and upfront. The case could be a bellwether of the effectiveness of the Federal Trade Commission’s 2025 Junk Fees Rule, which mandates added fees be clearly communicated to customers in the hotel and live entertainment industry. The rule in effect ends junk fees for those industries, with the Texas case being the first high-profile use of the new rule.
• Los Angeles enacted a city-wide ordinance in mid 2025 that raises the minimum wage for hospitality workers to $30 an hour, meant to combat the city’s high cost of living. Under the ordinance, hotel workers at properties with more than 60 rooms will get $25 an hour by July 2026, $27.50 by 2027, and eventually $30 the year after that. In addition, hotel employers will spend additional minimum amounts for health benefits. Industry associations, including the American Hotel & Lodging Association, don’t support the wage hike and claim it will economically hurt hotel owners. Other detractors are circulating petitions to put the plan to a public referendum. Proponents point to hospitality workers - who typically work more than one job to make ends meet - as needing a living wage in a city highly dependent on tourism, especially ahead of the 2026 FIFA World Cup and 2028 Summer Olympics, both in LA.

• New York City is bucking the downward trend of the tourism industry with its hotel segment outperforming last year, fueled by business and domestic travel. The occupancy rate for New York City hotels in the first half of 2025 was about 82% a week, per real-estate data firm CoStar, which is 20% higher than the national average. Revenue per available room, a key industry metric, stood at roughly $230 in the city versus $99 throughout the rest of the country. Business travel accounts for one in every four hotel room stays, per the NYC Department of City Planning, and the city expects continued high demand for the rest of the year. Other advantages for the NYC hotel industry include foreign travel to the city is still popular despite the overall national slump in visitors because of US immigration policy, as well as a 2023 law that limits construction of new hotels and keeps supply tight.
• Revenue per available room (RevPAR) in the hotel industry grew 2.2% year over year in Q1 2025 to a record $92, per JLL’s US Hotel Trends Investment Report, despite growing headwinds in the overall travel industry. Strong annual daily room rates drove the RevPAR boost, while hotels in urban areas performed particularly well on strong group and corporate travel during the quarter. Select-service and extended stay hotels were the strongest performers for investors by hotel type, with a 23% Q1 year over year boost in hotel transaction volume. These niche hotels have less overhead costs due to streamlined amenities and less labor. The report also noted a 5.7% RevPAR drop in economy hotels, a growing industry trend away from low-budget lodging in favor of more upscale hotels. JLL expects market softening in inbound international travel as foreigners grow wary of US travel due to Trump immigration policies.