Wrong. There may be less hotels paying more and costing the customer more. But there will be hotels. There will be 10 hotels paying $10.00/hr for labor or 7 hotels paying $15.00 for labor.
And yes, you are correct the price will go up for goods that do exist - which means the associate and folks in general are not actually making more, which defeats the point of your cheerleading raising wages in first place. If wages go up 25% but prices for everything go up 30-50%, how does that help?