The World Cup drove up hotel room rates in Los Angeles on match days but didn't do the same for occupancy.

The disconnect wasn't entirely a surprise.

“We had always proposed that this event would be a driver of room rate and not as much a driver of occupancy,” CoStar Group National Director of Hospitality Analytics Jan Freitag said. 

That is because other types of travelers, such as business and leisure travelers, stay away for the exact reasons that draw World Cup visitors. 

On match days between June 11 and July 25, the average daily rate for Los Angeles hotel rooms was $244.09, a 23% year-over-year increase, according to CoStar data. Revenue per available room was $178.65, up 25% year-over-year. Occupancy was roughly 73%, a 2% increase compared to the same period the previous year. 

“Corporate event planners [were] staying away from the markets where they knew they would have to compete with the fans for restaurant space, meeting space, higher airfare getting into the market and hotel room rates, and those meetings stayed away, and that was only partially offset by the influx of soccer fans,” Freitag said.

It is a phenomenon that tempered hotel results for markets that hosted matches across the country. 

Los Angeles hotel performance was very much as expected, Freitag said. 

LA’s room rate growth, in the low to mid-20% range, was on the lower end. San Francisco, Philadelphia and New York-Newark saw average daily rate growth in the 30% range. Seattle, Houston and Atlanta also saw year-over-year increases in the low to mid-20% range. 

“LA’s purported hotel underperformance is compounded by a unique combination of early FIFA block overcommitment creating artificial demand, concerns about visa barriers and operating costs,” Ralph Posner, chief communications officer for the American Hotel and Lodging Association, told the Los Angeles Times in May, when FIFA gave back hotel room blocks it had called dibs on in LA and cities around the country.

“The market was positioned as a flagship host city but is now absorbing a gap between expectation and reality,” Posner said.

The totals were also a far cry from the room results historically achieved during the Super Bowl, which regularly sees room rates grow by 100%, Freitag said. Los Angeles will host the next Super Bowl in 2027.

The World Cup provides instruction that can help hoteliers recalibrate their approaches to and expectations for the upcoming Olympic Games. 

Some hoteliers thought they would be able to push pricing harder, so they increased pricing and put restrictions such as three-night minimums or nonrefundable rates on their rooms. 

“As we got closer to the event, they realized, ‘Oh, we don't have the leisure demand that we wanted. Let’s relax those pricing rules,’” Freitag said.