Unanticipated Vacancy: U.S. Cities Experience Low Hotel Occupancy During World Cup

San Francisco finds itself at the center of a World Cup tourism slump affecting cities across the United States.

Initially, FIFA secured substantial hotel room blocks in the host cities for the tournament. However, months before the event’s kickoff, the organization unexpectedly canceled 75% of these reservations in several markets.

As a result, San Francisco is currently feeling the impact, with numerous hotel rooms left vacant and room rates stagnating. This outcome is a stark contrast to the optimistic predictions made by the city’s travel industry leaders, who had anticipated a significant economic boost akin to the one brought by the 2026 NFL Super Bowl.

During the Super Bowl weekend, San Francisco effectively showcased its ability to accommodate tourists, reaping considerable profits even though the game took place at Levi’s Stadium, 43 miles away in Santa Clara.

According to data from the Sports Management Research Institute, the average room rate during that period soared, reaching $394 per night for two-star hotels, $582 for three-star establishments, and a staggering $1,259 for four-star and above accommodations.

But unlike the Super Bowl, the World Cup’s booking impact has so far appeared more uneven. 

A similar trend is playing out nationwide: An American Hotel & Lodging Association (AHLA) report found that bookings are running well below expectations in almost every US World Cup host city.

The group said the trend does not align with FIFA’s claim that more than five million tickets have been sold, warning that the ‘anticipated economic lift may fall short.’

San Francisco has become a shining example of the World Cup’s tourism bust for hotels across the United States

The Golden Gate City is feeling the repercussions, with hotel rooms undersold and rates flat despite expectations the World Cup would replicate the Super Bowl’s economic boost

San Francisco’s hotels showed they could cash in on major sporting events during February’s Super Bowl weekend, when average nightly rates climbed to $394 for two-star hotels, $582 for three-star properties and $1,259 for four-star and above despite the city sitting 43 miles from Levi’s Stadium

The AHLA – the largest hotel association in the US representing more than 32,000 properties – said FIFA may have contributed to the shortfall by block-booking large numbers of rooms for its own use, effectively creating artificial demand.

The move initially pushed prices higher, but after FIFA later released a significant portion of those rooms it left a ‘vacuum of availability’ that has weighed on the market.

A study commissioned by FIFA and released last year predicted the World Cup could create 185,000 jobs in the US and add $17.2 billion to GDP.

Hotels had been preparing for an influx of international visitors, who typically book longer stays and spend more per trip.

But AHLA warned that fewer overseas fans visiting the US ‘threatens the broader economic impact.’

According to the report, FIFA’s large-scale room blocks across host cities ‘shaped revenue forecasts, staffing plans and preparations,’ and ‘manufactured artificial demand’ that masked weaker-than-expected tourism flows.

The AHLA also said up to 70 percent of rooms reserved by FIFA in cities including Boston, Dallas, Los Angeles, Philadelphia and Seattle have now been cancelled.

In Los Angeles, around 70 percent of the city’s hotels reported bookings below expectations ahead of the World Cup, LAist reported. 

Los Angeles is facing a similar challenge, with up to 70 percent of hotels reporting bookings below expectations ahead of the World Cup

A FIFA-commissioned study projected the World Cup would generate 185,000 US jobs and add $17.2 billion to the economy, but the American Hotel & Lodging Association warned that weaker-than-expected international tourism threatens those gains

Atlanta and Miami are the only host cities bucking the trend, with about half of hotels reporting bookings are in line with or ahead of expectations

Miami led all host cities in hotel demand, with the World Cup building on its already strong leisure tourism

The CEO of the Hotel Association of Los Angeles, Jackie Filla, told the outlet that LA hotels struck an agreement with FIFA to commit to having enough rooms to meet the expected demand through a room block agreement, but that those rooms are now sitting empty.

Filla also noted that bookings are unexpectedly low behind their usual summer numbers, adding that it could be due to the mega-event deterring travel to the city.

Two cities bucking the trend are Atlanta and Miami, where hotels say bookings are ‘in line with or ahead of expectations.’

Miami had the strongest demand, with the World Cup building on leisure demand, the AHLA report found.

After matches were announced in December, hotel operators in San Francisco were cautious about the World Cup’s economic impact, according to Alex Bastian, president and CEO of the Hotel Council of San Francisco, in comments to SFGATE.

He said the Bay Area was not assigned ‘first-place seed teams’ with large traveling fan bases, limiting expected demand.

Bastian added that a matchup featuring a country like Brazil would likely have driven stronger hotel bookings.

Brazil, along with Colombia and Portugal, is instead playing in Miami, which is also hosting a quarter-final and third-place match.

Michael Stathokostopoulos, senior director of hospitality analytics at CoStar Group, told SFGATE that marquee European teams such as Germany, Italy or Spain would also have boosted demand in San Francisco. 

Italy failed to qualify, while Germany is playing in Houston, Toronto and the New York City metro area, and Spain is playing in Atlanta and Mexico.

Levi’s Stadium will host a Round of 32 match on July 1, and Stathokostopoulos said later knockout games could draw stronger last-minute international demand depending on which teams advance.