When cities host major sporting events, the economic projections are typically as rosy as they are dubious. North America’s World Cup, which runs from June 11 to July 19, is no exception.
Altogether, FIFA has estimated $30.5B in US economic output. Host cities like Los Angeles are counting on World Cup visitors to spend $594m, more than it claimed as a recent Super Bowl host. Kansas City, Missouri, has predicted 650k tourists — or ~135k more than the city’s population.
This week, the rose-colored glasses came off, courtesy of a depressing hotel survey from the American Hotel & Lodging Association.
The big takeaway?
Around 80% of hotelier respondents across the US’s 11 host cities said their occupancy rates for June and July are lower than anticipated.
It gets even worse in Boston, Seattle, Kansas City, and Philly: Their hotel rates are tracking lower than a normal June or July without a supposed World Cup tourist boom.
The report follows other concerning signs about sluggish demand:
- Most host cities were showing AirBNB occupation rates below 50%.
- Flight data indicates average, or worse, summer bookings compared to years past in several host cities.
The hotel owners are blaming a few main culprits
The first is FIFA. The organization pre-booked and then canceled thousands of hotel rooms in the US, screwing up supply. Another is the White House, which is requiring some foreign visitors to put up a $15k bond to be a World Cup tourist.
And then there’s the cost of literally everything. Face-value nosebleeds for opening round games start at ~$140 and rise to above $1k depending on the match. In 1994, opening round nosebleeds were $25 (~$56 today), and the average ticket cost was $58 (~$131 today).
New Jersey Transit is charging $150 just to take the train from Penn Station to MetLife Stadium in the Meadowlands.
An overhyped World Cup might not be a huge deal…
…if North American host cities weren’t estimated to have spent ~$1.8B on preparations.
Small businesses have invested, too, expecting more shoppers, more people buying coffees and sandwiches and pizzas. Instead they might find out what economists have warned about big events for years: that you shouldn’t count on a massive tourist windfall just because a giant sports organization says so.
Sports And Esports
