World Cup: Kansas City bets US$200 million to become a tourist hub

Kansas City is making a big bet.

A nearly $200 million bet, in fact, that hosting the World Cup will transform this Midwestern hub into a global tourist destination. It's a bold proposition. The tournament has been dubbed the "World Cup of Chaos" because of disputes over immigration and exorbitant ticket prices. Kansas City's bet is that it can overcome all this - and convince people to keep coming back.

"You're putting yourself on the international stage," Victor Matheson, a professor at The College of the Holy Cross and an expert on sports economics, told CNN. "But do we really think that people from Japan and Uzbekistan and Cape Verde are saying, 'Hey, I'm going to take the trip of a lifetime to the United States and I'm going to choose Kansas City'?"

Local officials say this is their chance. Kansas City has never hosted anything so grand and may never do so again.

Organizers project more than $653 million in direct economic impacts through retail, food and beverage, hospitality and other sectors, said Jenny Wilson, vice president of tourism development at Visit KC. Organizers expect more than 650,000 visitors, enough to surpass the city's population of around 520,000.

Kansas City has beefed up public transportation lines to the airport, stadium and downtown fan festival. Property owners rented out their spaces. An Uber spokesperson said the company is adding more drivers as officials prepare for the city's six games, which begin on Tuesday.

But Kansas City is the underdog. Compared to the 16 host countries across North America, there aren't many direct flights abroad, and tickets aren't cheap. Fans may not stay for a longer vacation - Matheson is flying from Boston to Kansas City for a game and will only stay 36 hours.

And Kansas City is competing with cities like Mexico City, Los Angeles and Miami, which can amortize their considerable World Cup expenses throughout the year with other events and entertainment.

"What does a victory mean for a city?" Kansas City Mayor Quinton Lucas told CNN.

"When should a city invest in this kind of thing? We hope this World Cup gives us the chance to test some of it."

Great expectations
The World Cup, which generates billions of dollars, depends on the host cities to pay for infrastructure, transport, personnel and security. City, state and federal resources funded Kansas City's efforts.

Meanwhile, FIFA, the international body that governs football, pockets billions from ticket sales, broadcasting rights, sponsorships and licensing.

There have been some success stories: The 1996 Summer Olympics helped revitalize Atlanta's economy and global reputation, said Pam Kramer, executive director of KC2026, Kansas City's main World Cup planning organization. The city expects the same, with agricultural sector events aimed at executives and business leaders who are already in town for the games, for example.

In addition, Kansas City did not need to build new stadiums, which represented significant savings.

But the tournament brings other problems. Visa restrictions and the Trump administration's immigration policies are keeping foreigners away. FIFA ticket prices triggered an investigation by the attorneys general of New York and New Jersey. Many of the games are hundreds of miles apart.

A May report from the American Hotel and Lodging Association found that hotel bookings across the country were lower than expected by host cities, in part because FIFA canceled large blocks of reserved rooms. The tourism industry now expects more domestic travelers, who can book rooms for just one or two nights.

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In Kansas City, that means constantly reviewing estimation models for how many people will need transportation or lodging. Some decisions come down to "educated guesses," Lucas said.

At first, organizers didn't think Kansas City would have enough hotel rooms, so the city made it easier to rent homes. By the end of May, Kansas City had increased short-term rental listings by 56%, by far the biggest growth of any host city, said Jamie Lane, chief economist at AirDNA, which tracks short-term rentals like Airbnb and VRBO around the world.

Katherine Riedel thought her three-bedroom house was perfect for the occasion - close to the center and close to World Cup transport. This spring, she listed her home on Airbnb for the first time.

Her price: $1,000 per night, with discounts for longer stays.

Riedel said he has received a few requests from people wanting to book individual rooms during the tournament. Other than that, no one interested. In early May, Riedel lowered the rate to $500 a night - and quickly closed bookings with guests on a month-long work trip, as well as others coming for a quarterfinal in July.

"Many hosts in the area still think that if they stand their ground, someone will book at $1,500 a night," Riedel said. "I just don't think that's going to happen. I'd rather have money in my pocket than sit in my house in June thinking: this was a failure."

About 55% of Kansas City's short-term rentals are booked on game days, Lane said. He expects that number to increase. And so far, hosts are holding firm to prices. Available rooms are 182% more expensive than at the same time last year - some of the highest rates in the country, according to Lane.

"It's expectation versus behavior," he said. "The expectation was: I was going to be sold out two months ago, at four times my normal rate. And now, as the behavior unfolds, it's: I'm going to get a reservation a week earlier, at double my rate."

Charlie Hustle, a line of vintage-inspired t-shirts, believes the audience will come. The company has opened a new pop-up, launched a limited-edition U.S. Soccer collection and is selling t-shirts that mix flags with the brand's heart-shaped designs. When customers "enter our stores, it should scream World Cup", said vice president Katia Parker.

At Johnny's Tavern, some plans have been changing. The restaurant intended to add automatic 18% tips to all bills, as international tipping culture is often unpredictable. But it has backed off in recent days, said partner Kyle Witherspoon. The restaurant was not receiving many foreign tourists.

And that ran the risk of angering local residents in the meantime, he said.

"We don't know if we're doing it right or not," Witherspoon said. "How do we take care of our employees without excluding any of our regular customers who have been with us for so long? It's a fine line we're trying to balance."

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Source: CNN