World Cup Fails to Deliver Expected Hotel Occupancy Surge in Toronto
Disappointing figures raise questions about tournament's local economic impact
Toronto’s hotel sector has not experienced the anticipated economic windfall during the early stages of the World Cup, despite initial projections and widespread expectations. Data compiled for the Greater Toronto Hotel Association (GTHA) reveal that hotel occupancy rates during the first two weeks of the tournament have declined compared to the previous year, a trend that has prompted scrutiny of the event’s real economic contribution to the city and its hospitality industry.
In the week ending June 13, which included Canada’s opening match against Bosnia and Herzegovina, hotel occupancy in the Greater Toronto Area stood at 82 per cent. This figure was down from 83 per cent during the same week last year. The following week, ending June 20 and featuring matches such as Ghana versus Panama and Germany versus Côte d’Ivoire, occupancy rates dropped further to 72 per cent, compared to 86 per cent in the corresponding period of the prior year.
Sara Anghel, CEO of the GTHA, acknowledged the declines but emphasized that the situation is not catastrophic, noting the ongoing activity in the city, including events like Blue Jays games and Pride festivities. Anghel observed that while the World Cup has led to the displacement of meetings and conventions—key sources of business for hotels—Toronto remains active with various events. She also indicated that, until June, hotel sector performance had been improving, with occupancy in May surpassing last year’s levels.
Anghel suggested that the summer’s overall performance could improve in July and August, attributing current results in part to potential travellers possibly rescheduling visits to avoid the city during the tournament. The prospect remains that late summer could offset the early downturn.
One contributing factor to the softer-than-expected numbers was FIFA’s cancellation of thousands of hotel room block holds in April. These reservations had initially been set aside for FIFA personnel, journalists, and other stakeholders, leading to more optimistic projections prior to their release.
Economist Victor Matheson, who studies the sports industry, described hotel occupancy as a strong indicator for measuring the economic impact of major sporting events, since it reflects the influx of out-of-town visitors. He noted that the current hotel data should serve as a reality check for those who expected a significant economic boost from hosting World Cup matches.
A study prepared by Deloitte for FIFA had projected the tournament would generate $940 million in economic output for the Greater Toronto Area and $3.8 billion across Canada. However, Matheson characterized the report as “pure propaganda,” contending that such numbers are misleading. Pedro Antunes, chief economist at Signal 49 Research, formerly known as the Conference Board of Canada, echoed concerns about methodology, explaining that economic output figures often count transactions twice. Antunes further stated that even if gross domestic product were used as the metric, it would remain difficult to determine the tournament’s actual economic impact for Toronto and Canada, as the so-called counterfactual—what tourism levels might have been without the World Cup—remains unknown. He noted that this could have been a weak year for tourism regardless of the tournament.
Ryan Mallough, vice president of legislative affairs at the Canadian Federation of Independent Business, observed that while bars and restaurants broadcasting World Cup games have seen increased business, such venues typically experience a boost during any World Cup, regardless of whether matches are played locally. He noted that establishments near the stadium or hosting watch parties are performing well, but this is a recurrent trend during World Cup periods. Mallough stated that there has yet to be evidence of a broader economic impact from additional tourists, nor has there been notable success or failure reported by businesses.
Tournament advocates have cited the potential for a global marketing benefit, suggesting that hosting World Cup games could elevate Toronto’s international profile. Matheson questioned the significance of this effect, noting that with the tournament split among 16 cities across Canada, the United States, and Mexico, any attention is diffuse. He argued that even when large-scale events are concentrated in a single city or small area, tangible marketing benefits for the host are limited. According to Matheson, spectators who view such events are more likely to aspire to attend future tournaments than to visit the specific host city.
The current experience in Toronto is not unique among host cities. Anghel pointed out that cities such as Los Angeles are encountering similar challenges with hotel bookings, suggesting that expectations have not been met across all 16 host locations. Anghel stated that the situation is consistent among the host cities, all of which have seen outcomes fall short of initial projections.
Despite the underwhelming early results, the tournament has generated strong television audiences, with the Canada-Bosnia match drawing 600,000 more viewers than the Stanley Cup finals. However, this increase in viewership has not translated into a corresponding uptick in hotel stays or broader tourism activity.
The ongoing situation underscores the complexity of measuring the economic impact of major sporting events, particularly when expectations are set by projections that may not fully account for factors such as displacement of regular business, shifts in traveller behaviour, and the diffused nature of multi-city hosting. The experience in Toronto raises broader questions about the reliability of economic forecasts associated with large-scale events and highlights the importance of evaluating both direct and indirect impacts on local economies.