World Cup Host City Hotel Performance Exceeds Expectations: RevPAR Growth Surpasses Initial Forecasts
CoStar data shows that hotel RevPAR growth in World Cup host cities has exceeded the pre-tournament forecast of 13%, with an average increase "well above 20%" from June 11 to 27. Cities such as Miami and San Francisco performed strongly, but overall occupancy remained stable, with growth primarily driven by room rates.
Key Takeaways
- For the week ending June 27, U.S. hotel performance grew solidly, boosted by the World Cup: revenue per available room (RevPAR) rose 9.6% year over year, average daily rate (ADR) increased 9.2%, and occupancy was essentially flat, up just 0.4%. Data from CoStar.
- Miami, a World Cup host city, posted the highest ADR increase that week at 51.1% year over year; RevPAR grew 51.6%. San Francisco, which hosted two matches, ranked second in occupancy and RevPAR gains, up 10.9% and 40.7% year over year, respectively.
- CoStar had previously forecast that host-city RevPAR would grow 13% year over year during the tournament from June 11 to July 19. But data through June 27 show actual gains have already exceeded that forecast—host-city hotel RevPAR is averaging increases "well above 20%," according to Didio Pequeno, CoStar's director of hotel market analysis.
Deeper Dive
Pequeno noted that from June 11 to 27, San Francisco, Dallas, and Kansas City, Missouri, posted the highest host-city RevPAR gains at 54.5%, 27.2%, and 25%, respectively. He mentioned that Bay Area hotels had "underperformed" last year, making this summer's numbers "look a bit better."
RevPAR growth was driven primarily by room rates, with occupancy remaining broadly stable across host cities. "Our thesis all along has been that this would not be an occupancy-driven event, but a rate-driven event," Pequeno said. "And that has been proven out in most markets."
According to Pequeno, as of the end of June, San Francisco and Dallas were the only two U.S. host cities with occupancy growth. Most other host cities saw occupancy declines, but "significant" rate increases offset those drops.
"The rate increases show that World Cup travelers are willing to pay higher prices," Pequeno said. "They displaced U.S. travelers who had planned to visit the same markets this summer but spend less."
Among San Francisco, Dallas, and Kansas City, Pequeno believes Dallas's growth most closely matched expectations, because AT&T Stadium in Arlington, Texas, hosted the most matches of any venue in the tournament (nine total).
Meanwhile, Kansas City, the smallest U.S. host city in the tournament, saw ADR rise 34% year over year from June 11 to 27, according to data from Pequeno.
Looking ahead, Pequeno said hotel performance in U.S. host cities will depend on which teams ultimately advance, as certain countries have large, loyal fan bases that travel with their teams.
He expects the final on July 19 at MetLife Stadium in New Jersey to provide a significant boost to hotels in nearby New York City.
"I think the final is going to be a Super Bowl-level event," Pequeno said.