World Cup host cities across North America have shelled out hundreds of millions of dollars for security, watch parties and stadium renovations ahead of this year’s tournament, which begins Thursday, but experts say they are unlikely to recoup those investments.
Hotel bookings have fallen short of expectations, and thousands of tickets remain available. Several U.S. sites are now hosting giveaways to fill seats.
The outcome has not shocked sports economists. The tepid response is further complicated by the ongoing military conflict in Iran and the controversy surrounding the Trump administration’s approach to international visitors.
They have long warned that mega-events, such as the World Cup and the Olympics, often fall short of economic projections.
“When you go back and look at prior countries and prior experiences, the local hosts have not made money. And in many cases, they’ve spent billions and billions of dollars,” said Richard Sheehan, a professor at Notre Dame who studies sports economics.
This year’s World Cup — awarded to the United States, Canada and Mexico by soccer’s global governing body, FIFA — dodged the most extreme costs by using existing stadiums. The hosts’ economic outlook still looks dire, with minimal buzz surrounding one of the biggest events on the global sports calendar.
Normally, economists have to wait until after an event to begin their autopsy, but the warning signs appeared before the World Cup kicked off.
“From basically January, FIFA has said that they received 750 million applications for 7 million tickets, but we still see them making new tickets available for sale,” said Victor Matheson, a sports economist and professor at the College of the Holy Cross. “An organization that makes more tickets available is not one that has sold out every ticket.”
The causes for concern have extended beyond the stadiums. In May, the American Hotel and Lodging Association surveyed hoteliers across the 11 U.S. host cities. The results were damning.
More than 75% of respondents said bookings were tracking below the initial, optimistic forecasts. Fewer than a quarter of the U.S. World Cup cities were reporting any meaningful increase over a typical summer.
“Hotels across host markets have spent years preparing for the World Cup, and while there is real excitement, the data points to a more nuanced outlook,” Rosanna Maietta, president and CEO of the American Hotel and Lodging Association, said in a statement. “A range of factors have tempered early optimism, though forward indicators show there is still meaningful opportunity ahead.”
Ms. Maietta indicated that early estimates pointed to a heavy balance of domestic fans, who typically contribute less to the economic impact than those traveling from overseas. She urged FIFA and U.S. officials to minimize the headaches for international travelers.
Her pleas went unheard as U.S. officials denied a Somali referee a visa to work the tournament and FIFA revoked the tickets allocated to Iran for its group-stage matches.
Breaking even
Host cities across the U.S. leaped at the chance to host World Cup matches. Their early studies estimated more than $600 million of economic impact for cities such as Seattle and Kansas City.
Those reports were always optimistic, economists said.
“Those numbers are wildly unlikely. That presumes that every single person who walks through the stadium gate is contributing $1,000 to the economy that would not have otherwise done that,” Mr. Matheson said. “There’s some gigantic problems with this.”
Chief among them is the fact that FIFA will keep the overwhelming bulk of ticket revenue. Soccer’s international governing body rolled out dynamic pricing this year, with top-tier tickets fetching more than $10,000 for semifinal and final matches.
Mr. Sheehan estimates that FIFA will pocket about $7 billion from ticket sales. Meanwhile, Mr. Matheson projected FIFA’s total revenue for the tournament at more than $10 billion.
“FIFA is very stingy about sharing any of their revenues. You’ve seen the stories about the cheapest tickets going for $400, but FIFA is sharing very little of that money with local hosts,” Mr. Matheson said. “They’re pocketing all of that. They’ve also been very restrictive about the ways that local host committees can get sponsors.”
Broadcast rights, like ticket sales and sponsorship deals, also fail to impact localities’ bottom lines.
Instead, the hosts are forced to rely primarily on hotel and restaurant revenue. That is where the nine-figure projection from committees in San Francisco and Kansas City came from.
Visit KC expected 80% of World Cup attendees to fly in for the matches, necessitating hotel rooms at $300 per night and millions of meals at local restaurants from the 650,000 unique visitors.
“A huge number of tickets sold are going to locals. There’s not that many people traveling from across the world to see Algeria vs. Austria,” Mr. Matheson said. “That’s just not the sort of draw.”
The early hotel reports matched his skepticism, but locals do not need hotels, and any meals they eat in the city would have benefited the local economy even without the World Cup.
The high ticket costs, combined with airfare and lodging, have changed the calculus for international fans.
“It knocks a lot of people out. That’s most likely the biggest reason that you have fewer foreign travelers than most people would have predicted six months ago,” Mr. Sheehan said.
Combine that with the Trump administration’s strict approach to issuing visas, and it is easy for fans to opt out of this year’s event.
“The visa system is the invisible gatekeeper of the World Cup,” Celine Atallah, an immigration lawyer in Boston, told the BBC. “FIFA can sell a ticket, but the U.S. government decides who gets a visa, and CBP decides who actually enters.”
Even European fans who would receive less scrutiny at the border could be intimidated by the approach.
“You can easily imagine them saying, ’Look, I love the World Cup and I’m glad my team is in it, but I don’t really support what’s going on in the United States. I’m going to save my money,’” Mr. Matheson said. “The data clearly shows that Trump’s policies have reduced foreign tourism.”
Without a significant influx of foreign travelers, the host cities are forced to rely on domestic visitors to make their World Cup investment worthwhile. Yet summer is already the busy season for the major markets hosting the tournament, including Los Angeles, Kansas City, Houston and Dallas.
New York City reported average summer demand to the American Hotel and Lodging Association. Los Angeles and Kansas City hoteliers reported fewer bookings than in a typical summer. That is a problem for the hosts’ economic projections.
“Their hotels are full in the summer anyway. So you worry about displacing regular tourism business: travelers who can’t get in because of a lack of good space for several days around these games, we’re not having many conferences, trade shows or conventions,” Mr. Matheson said. “You have the World Cup displacing a bunch of regular tourists, which you’re concerned about.”
The U.S. host cities saved money compared with previous events in Qatar and Russia by retrofitting NFL stadiums for their World Cup matches. Still, each local jurisdiction spent $50 million to $100 million to meet the strict security and venue requirements set by FIFA. A lack of tourism revenues has jeopardized their investment.
“You’re looking at a Kansas City or Seattle or even L.A. or New York and saying, ’Are they really going to generate enough revenue here to be able to offset the expenses as they occur?’” Mr. Sheehan said.
“For most cities, it’s going to be roughly a wash,” Mr. Matheson predicted. “It’s certainly not going to be an economic enhancer.”
Leaving a legacy
The dollars and cents were not the only factors for prospective hosts who lined up, eager to join the ranks of host cities. Billions of potential travelers worldwide will tune in for the World Cup.
Organizing a match is essentially an unmatched advertisement, according to some host committees.
“Few events generate the kind of global excitement and interest that we see with the World Cup, and that’s something we as a destination marketing organization will leverage to solidify our position in target markets like Mexico while reaching new ones,” a spokesperson for the Houston First Corp. said.
The theory is not totally unfounded. Salt Lake City became a popular ski destination after hosting the 2002 Winter Olympics. Barcelona evolved from Spain’s second-choice city to a bona fide vacation destination thanks to the 1992 Olympics.
“While we expect the World Cup will help deliver a better-than-normal June and July for our hospitality sector … we believe the exposure the event generates will also help grow awareness of Houston as a global destination long after the tournament wraps up,” the Houston First Corp.’s representative said.
Yet Salt Lake City and Barcelona were hidden gems compared with most other host cities. The same title cannot apply to already-famed sites such as New York and Los Angeles, and a World Cup on its own will not move the needle.
“If people don’t know where we are now, the World Cup isn’t likely to make a hell of a lot of difference,” said Mr. Sheehan, who added that Canada and Mexico may experience a greater impact.
Beyond the outlier “hidden gem” examples, sports mega-events such as the World Cup and the Olympics rarely yield long-term tourism gains. Visitors who have a standout time at this summer’s World Cup are not typically incentivized to return to cities such as Philadelphia, Boston or Seattle. They leave wanting to plan a trip for the 2030 World Cup, which will be hosted by Morocco, Portugal and Spain.
“It doesn’t generate legacy for the city itself,” Mr. Matheson said. “The Olympics, for example, aren’t going to put Paris or London on the map. Because if Paris and London aren’t already on your map, then you need a new map.”
This year’s World Cup will feature 104 matches across 16 cities — 11 in the U.S., three in Mexico and two in Canada. The tournament begins Thursday evening with a match between Mexico and South Africa in Mexico City.
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