Since June, we have taken calls from hotel owners in World Cup host markets, each asking a version of the same question: The summer produced the strongest June and July in years, but does that create a financing opportunity?
The answer is yes, though not necessarily the opportunity most owners have in mind. A stronger trailing twelve months may support a request for additional proceeds, but the more important question is how much of the performance a lender will view as sustainable. In some markets, the data supports a durable change in pricing power. In others, it reflects a one-time event that should not be used to support permanent debt.
A Pricing Event, Not A Demand Event
CoStar and Tourism Economics had projected host-market RevPAR growth of 12.7 percent for June and July. Through late June, the eleven U.S. host markets were running well above that, averaging RevPAR gains of more than 20 percent. On the surface, that looks like an unambiguous win. For owners evaluating financing, however, the headline RevPAR gain is only the starting point.
The composition of that growth was remarkably consistent, and it was almost entirely rate. HVS, using CoStar data, constructed a counterfactual baseline of what each host market would have produced during the match weeks without the tournament and then compared it with actual results. RevPAR rose in all eleven markets. Occupancy fell against the baseline in seven of them, ranging from a 6.3-point decline in Seattle to a half-point decline in Boston. Only Los Angeles, Dallas and San Francisco saw occupancy improve.
The explanation is straightforward. Hotels priced for anticipated demand, but in several markets that pricing displaced business the market would otherwise have captured. Atlanta and Seattle even posted weekly RevPAR declines during the tournament. That displacement occurred within the same summer and must be reflected in any assessment of normalized performance.
The displacement was neither free nor deferred. It occurred within the same summer and must be reflected in any honest assessment of normalized performance.
Kansas City and Los Angeles
Two markets make the distinction clear. By HVS's counterfactual measure, Kansas City posted a RevPAR gain of $20.04 during the match weeks, while Los Angeles posted a gain of $18.64, ranking third and fourth among the eleven host markets.
The gains are nearly identical. The operating performance behind them is not.
Los Angeles achieved match-day ADR of $244.09, up 23 percent year over year, with RevPAR of $178.65, up 25 percent, while occupancy held at roughly 73 percent, up 2 percent. Against the counterfactual baseline, occupancy rose by a full point. Los Angeles moved rate materially without surrendering demand.
Kansas City moved rate even more, but it surrendered demand. During the week of July 5 through July 11, a 45.3 percent ADR increase more than offset a 4.7-point occupancy decline. Measured against the counterfactual, occupancy finished the match weeks down 4.6 points. The weaker demand was visible before the tournament, with most Kansas City hotels surveyed in April reporting booking pace below expectations.
Two markets, one RevPAR gain and two entirely different operating stories for owners and lenders to underwrite.
Rate-Only Lift Versus Compression-Verified Lift
This is the distinction that should govern how owners use the summer’s results in any capital markets conversation.
Rate-only lift is a RevPAR gain produced by pricing against demand that softened. It reflects an event-specific pricing decision rather than a durable change in market demand, and it gives a lender little evidence of what the asset can sustain. Owners should expect that portion of the lift to be normalized out of the trailing twelve months.
Compression-verified lift is a RevPAR gain achieved while occupancy held or improved. That is evidence rather than noise. It demonstrates that the market absorbed a higher rate without shedding demand, which is the clearest test of whether an asset’s rate ceiling has moved. Los Angeles was one of the few World Cup markets that cleared that test.
Where rate increased and occupancy held, owners gained evidence that the market may support stronger pricing during future compression periods. That can inform budgets and revenue strategy, but it may not translate into additional loan proceeds today.
Why the Trailing Twelve Is the Wrong Document
Debt sizing today is often constrained by debt yield, with conduit floors generally ranging from 9 percent to 11 percent. Any trailing twelve-month period through June 2027 will include the tournament’s impact on cash flow.
While lenders have not established a consistent approach, we expect most to give partial credit based on the strength of each property’s supporting data. Owners should provide a documented normalization showing daily ADR and occupancy, segment performance, shoulder-night results, and comparisons with prior-year performance. A well-supported bridge allows the owner to frame the adjustment.
Show the Longer Trend and Label the Life
Our recommendation to owners considering refinancing in host markets over the next twelve months has two parts.
First, present the trailing 12 alongside a trailing 24- or 36-month view, and provide a clear bridge to normalized cash flow. This places a six-week event in context and gives the lender a defensible run rate.
Second, label the lift. Separate the portion attributable to rate growth during softening occupancy from the portion achieved with occupancy intact, and present both. The first should be excluded from a sustainable underwriting case. The second is worth supporting with data, and the argument becomes more credible once the owner has already acknowledged the event-driven portion.
A lender may be willing to size a loan using the elevated trailing results, but owners must determine whether normalized cash flow can support that debt through maturity. Borrowing against nonrecurring revenue creates refinancing risk. Owners should borrow only against the portion of the World Cup’s value that will last.