World Cup Hotel Demand Falls Short of Expectations Across North America

If you thought finding a hotel room in a World Cup host city would be nearly impossible, the reality may come as a surprise.

From Toronto to Seattle, and from Seattle to Mexico City, hotel bookings are struggling to reach a 50% occupancy rate. According to a report by The Wall Street Journal, U.S. host cities are lagging behind their Mexican and Canadian counterparts, with San Francisco the only American host city to surpass the 44% mark.

By comparison, Vancouver and Guadalajara have the highest occupancy rates at 48%, while Toronto, Mexico City and Monterrey are also more than 40% booked, according to data from CoStar.

One of the biggest factors behind the underwhelming occupancy rates is pricing. Match tickets have reached record highs, discouraging tourists and fans alike from making the trip.

"When it got down to pricing and being able to make those decisions, there were a lot of aspirational travelers who were probably shut out of the marketplace," Dave Guenther, president of luxury sports travel company Roadtrips, told The Wall Street Journal.

Another factor behind the thousands of vacant hotel rooms in the United States is the current sociopolitical climate, which has discouraged some fans from traveling because of visa concerns.

Those who are making the trip are increasingly bypassing traditional hotels in favor of less expensive short-term rentals. Those properties are seeing a significant boost in demand, the report said, with guest demand around match dates far outpacing other markets, according to AirDNA data.

Short-term rentals in Mexico are also generally more affordable than hotels in U.S. and Canadian host cities, with nightly rates around $100 in some markets, compared with roughly $300 a night in cities such as Boston and Miami.

"Those cheap budget places are going first and fastest," Bram Gallagher, director of economics and forecasting at AirDNA, told the outlet.

Concerns about clearing customs at U.S. airports are also deterring some international visitors, hotel owners said.

"I think the media stories surrounding people who've been detained haven't helped," said Jon Bortz, chief executive of Pebblebrook Hotel Trust.

In some host cities, including Miami, occupancy rates remain flat because the World Cup has displaced other business that hotels typically rely on during the summer, according to Bortz. He said the tournament has so far generated fewer bookings than this year's World Baseball Classic.

As the World Cup draws closer, hotels are counting on a wave of last-minute reservations to boost occupancy rates. The Wall Street Journal reported that Host Hotels & Resorts, which operates properties in 10 U.S. World Cup markets, is already seeing a 38% increase in average daily rates from transient travelers.

"If you look at some historical booking patterns, up to 40% of bookings materialize within 0 to 6 days before the match," CEO Jim Risoleo told the newspaper.