World Cup hiring lift falls short in U.S. hospitality sector

The FIFA World Cup has not yet delivered the U.S. hiring lift that organizers and forecasters expected, according to Bloomberg. The shortfall matters for hotels, restaurants and entertainment venues that had looked to the tournament for relief during a difficult travel season.

FIFA had estimated before the June 11 kickoff that the tournament could support the equivalent of 185,000 full-time jobs, with much of the effect expected in leisure and hospitality. Bloomberg reported that several Wall Street banks also expected a smaller but still meaningful payroll gain tied to the event.

Instead, Bloomberg said the latest jobs report showed that a May increase in leisure and hospitality employment was wiped out in June. Employment in the sector fell by about 21,000 over the two-month period, according to the report cited by Bloomberg.

Tourism boost has been uneven

The World Cup, the first held in the U.S. since 1994, is a five-week tournament expected to draw more than 1 million fans to 11 U.S. host cities, according to Bloomberg. The U.S. is co-hosting with Canada and Mexico and is staging most of the matches.

Bloomberg reported that the tournament had been seen as a possible support for a tourism industry facing pressure from President Donald Trump’s tougher border policies and higher fuel costs linked to the Iran war. High hotel prices and match tickets have raised doubts about how much spending the event will generate, Bloomberg said.

Eli Nir, a U.S. economist at TD Securities, told Bloomberg that geopolitical strains, higher airfares and other barriers may have held back international travel for the World Cup, reducing the need for extra leisure and hospitality workers.

Hotel data show a mixed picture. CoStar said U.S. hotels recorded record revenue per available room during the week of June 21-27, the busiest stretch of the tournament so far, but the gain came more from higher prices than fuller hotels.

CoStar data cited by Bloomberg showed revenue per available room in host markets rose nearly 17%, while occupancy declined by almost 3 percentage points from a year earlier. CoStar said some business and leisure travelers may have avoided host cities because they expected higher prices and crowds.

Employers hold back on hiring

The American Hotel & Lodging Association had warned before the tournament that demand was softer than expected. In an April survey of host-city hotels, the association found bookings below expectations for 80% of respondents, according to Bloomberg.

Hotel operators pointed to FIFA’s release of unused room blocks, visa delays and geopolitical tensions as factors weighing on international travel, Bloomberg reported.

Shruti Mishra, an economist at Bank of America, said after the June jobs numbers that businesses may be choosing to give existing employees overtime rather than add staff, according to Bloomberg. Bank of America had previously projected the World Cup would add 30,000 to 40,000 jobs across May and June.

Bloomberg reported that average weekly hours in the leisure and hospitality sector did not rise nationally in June, while wage growth remained slower than in most other sectors. Some individual businesses, though, are using existing staff to meet event-driven demand.

Horacio Weschler, owner of Lala’s Argentine Grill in Los Angeles, told Bloomberg that reservations fill almost immediately on Argentina match days and that fans from Paraguay and Australia have visited while in California. He said he is giving extra shifts to his more than 100 current employees instead of training new workers because hiring has been difficult.

Gusto, a payroll-processing platform, found that entertainment and food-and-beverage businesses near stadiums outperformed other areas in hiring during May, according to Bloomberg. Farther away, the gains have been weaker: Brett Dowell, owner of Hammers Dueling Piano Bar in Kansas City, told Bloomberg he hired five people in May but stopped scheduling them after World Cup traffic failed to spread beyond the Power and Light District.

This story draws on original reporting from Fortune.