Hotel owners in New York City may see their rates rise even higher after signing what industry officials call the most expensive union agreement in the city’s history, which would have resulted in significant wage increases for staff members while raising affordability concerns for travelers and smaller hotels.

The agreement, which was reported by The Wall Street Journal last week, increases hotel employees ‘ hourly pay by roughly 50 % over the course of eight years in order to prevent a strike prior to next month’s FIFA World Cup kickoff. Some maids are anticipated to make six-figure earnings by 2032.

Operating costs in a city with some of the nation’s highest common hotel prices outside of major destination markets are already significantly increased thanks to the agreement, according to resort owners. Last year, according to CoStar, average hotel rooms in New York cost$ 334 per day.

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According to David Sherwyn, a professor of hospitality at Cornell University,” the only way to keep your profit going when your costs go up is to keep raising your rates.” &nbsp,

According to industry leaders, the new agreement will increase hotel operating costs by about 15 % annually, putting pressure on establishments to pass those costs on to consumers at a time when many travelers already have to pay more for fuel, flights, and vacations.

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Hotel owners who had hoped the FIFA World Cup would boost hotel occupancy were also at a hard time because of the labor agreement. Despite the place hosting eight games, including the final last, New York City hotel occupancy for June &ndash, when the game begins &ndash, was roughly 12 percentage points below last year’s levels, according to CoStar.

Some visitors and business travellers may be avoiding the area because of concerns about audiences and rising World Cup ticket prices, according to experts.

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Because higher-income guests continue to spend money despite rising costs, luxury hotels are expected to perform better. According to statistics from the Bank of America Institute, middle-class and lower-tier accommodations may be under force this year as lower-income families reduce travel costs.

The hotel industry in the city continues to be concerned about global commerce. Despite hotels reporting that demand is beginning to recover, some operators claim that as a result of political tensions relating to the Iran conflict, hotel bookings decreased earlier this year.

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Hotel executives warn that rising airline ticket prices, journey cuts, and concerns about U.S. border screenings may add to the decline in global journey, which has long been viewed as a key driver of New York’s tourism economy.