The World Cup in the New York Area Isn’t the Boon Hotels Had Hoped For

On May 11, New York Mayor Zohran Mamdani dribbled a soccer ball through a sea of excited children before misfiring at the goal on an asphalt road in front of PS 32 in the Bronx.

The mayor was on hand that Monday to promote Soccer Streets, a city program that would temporarily close roadways in front of 50 schools to traffic for two months, allowing kids to practice drills, make art, and do other activities in celebration of the World Cup next month.

“We want every kid in this city to experience the joy of the game,” Mamdani said in a statement. He referenced the city’s longer-running Open Streets initiative as a model for the soccer theme. “These activations are another step toward bringing the World Cup to our city’s young people.” 

Football fever has simmered across the city ever since FIFA, international soccer’s governing body, announced in 2018 the World Cup would return to North America with MetLife Stadium hosting eight matches, including the July 19 final.

More than 1 million people are expected to travel to New York and New Jersey for the 32-team tournament, which could generate $3.3 billion in economic activity, according to the FIFA World Cup New York-New Jersey host committee. 

But the World Cup windfall hotels expected to receive may not materialize. 

One month before the games kick off, New York hotels have filled only 25 to 30 percent of their rooms during the tournament, according to hotel booking data from CoStar that tracks real estate analytics. Those figures are roughly 8 and 12 percentage points below booking levels for the same month a year ago, CoStar found. Only 31 percent of New York hotel rooms were full on the first day of the matchups, while a mere 20 percent of rooms were spoken for during the championship, CoStar found. 

Hospitality industry leaders predict a 10 percent increase in revenue compared with last year as fans will make last-minute
plans to attend the tournament. But the lack of demand for rooms earlier this year could cost the region’s hotels an estimated $100 million in anticipated business, industry officials claimed. 

“FIFA promised 1.2 million visitors would come. However, demand remained flat year-on-year from February through the end of April,” said Vijay Dandapani, president and CEO of the Hotel Association of New York City. “In the end we expect to do better than last year, particularly with last-minute purchases, but the visitor number is expected to fall short by more than 50 percent.”

There are myriad factors beyond the football pitch that have dampened interest in the world’s most-watched sporting event. 

Some fans are balking at the tournament’s high ticket prices. The cheapest tickets for MetLife’s first match between Brazil and Morocco are close to $1,500 on some resale markets, while the championship starts at about $8,000. Last month, someone listed four championship seats on FIFA’s resale site for $2.3 million each (the most expensive tickets on StubHub on May 12 were $84,000 each).

Meanwhile the cost of traveling to New York keeps growing. Airfare has surged since the U.S. war in Iran caused oil prices to float above $100 per barrel, forcing Air Canada to suspend flights to JFK Airport for five months. Meanwhile, the inflation rate jumped to 3.8 percent in April, its highest rate in three years. And New Jersey Transit is charging passengers $98 for round-trip fares to get to the Meadowlands, when the trip typically costs $12.90 (it had been as high as $150).

On top of that, the Trump administration’s visa restrictions and travel bans affecting more than three dozen countries have made visiting the United States challenging. Delays to obtain a temporary, non-immigrant visa for citizens of some countries, such as Colombia, Ecuador and Peru, can take as long as one year. And those applying for a visa waiver through the Electronic System for Travel Authorization (ESTA) have encountered new queries regarding their emails and social media handles that can reject an applicant if Customs officials uncover what they deem dangerous or offensive material. 

Then there’s the president’s immigration enforcement policies that have captured tourists in weeks-long detentions. Taken together, these actions have convinced some foreign fans to cheer from their homelands.

“Anti-American sentiment due to Trump administration messaging and fears of being stopped at the port of entry has deterred some travelers,” Dandapani said. “Unhelpfully, a group led by former FIFA President Sepp Blatter has actively urged citizens of other countries to not travel to the U.S. for the tournament.” 

There are other factors, too. Corporations that would have booked events in New York likely avoided the city during the tournament so they wouldn’t have to compete with soccer fans. It did not help that FIFA reserved rooms for days around its games, then released them when demand did not appear.

“FIFA blocked rooms for nights when there were no games and then said 120 days out, ‘Oh, we don’t need those room blocks,’ so hotels had a hole to fill,” said Jan Freitag, national director for hospitality analytics for CoStar. “Hotels call this ‘wash.’ The expected room block would usually wash at 50 percent or so, but the fact is that it washed far more than that.”

As a result, hotels have been scrambling to fill their vacancies with domestic vacationers and corporate groups looking for deals. Some hotels are dropping their prices or eliminating minimum stays, which would have required guests to book at least two or three nights around a match. FIFA even released more tickets through its website in April to entice last-minute shoppers, while prices on resale sites fell 25 percent over the past 30 days. 

“Obviously, everyone would rather lock in occupancy and push their pricing, but everyone is realistic that the booking window is going to end up being shorter,” said Jonah Sonnenborn, head of real estate at owner Access Industries. “In New York, where there are so many options,people feel there’s a lot of flexibility and availability, and they can wait.”

That doesn’t mean every hotel is struggling. Faena New York, a luxury hotel in Chelsea in Access Industries’ portfolio, is planning several World Cup-themed events with soccer-related groups along the High Line. And the Lightstone Group, which developed six Moxy hotels in the city, has seen its occupancy rates outpace last year’s levels.

“Across our portfolio, we have been carefully monitoring demand for the World Cup over the last year to best position ourselves for success,” Mitchell Hochberg, president of Lightstone, said. “When we saw the market wasn’t reacting as everyone had anticipated, we strategically layered in group and corporate business while capitalizing on higher rates for transient World Cup visitors.”

New York is also doing its part to entice ultras and fanatics from around the world to stay in the city and make it easier for them to get around. 

Mayor Mamdani announced plans to host live watch parties in each borough at places like Rockefeller Center and Brooklyn Bridge Park, a new center-running bus lane from LaGuardia Airport to the subway, and a neighborhood passport to track all the game-day experiences in the outer boroughs. New York Gov. Kathy Hochul also unveiled a new shuttle bus service, reducing the price of a round-trip bus trip to MetLife Stadium from $80 to $20. 

As prices for tickets and travel continue to drop, the draw of seeing the world’s most popular sporting event in perhaps the world’s greatest city may be too good to pass up.

“People will want to be a part of this,” Sonnenborn said. “As the action gets closer, the fervor will build, and people will go buy tickets and realize they have to stay somewhere overnight. And then the escalation will happen.”