Economic impact of World Cup hosting

Hosting World Cup matches in Toronto has resulted in a marginal economic impact, according to recent data. While international tourist spending has seen an increase in certain categories, overall spending, including that of locals and domestic tourists, has only slightly surpassed the rate of inflation. This assessment comes from data released by payments processing company Moneris.

Victor Matheson, an economist specializing in the sports industry’s economic impact, suggests that the presence of foreign tourists may have displaced regular visitors. This displacement could mean that the economic benefits of hosting six World Cup games have been minimal. Matheson, a professor of economics at College of the Holy Cross, noted that the best-case scenario is that domestic tourism and business travelers are displaced to later in the year. The worst-case scenario, he explained, is that overall spending is pretty much a wash, making the hosting an expensive endeavour for Toronto and Vancouver.

Moneris data from June 12 to June 26 indicates that total spending at Toronto bars and restaurants increased by three percent compared to the same period last year (June 13 to June 17, 2025). Spending by foreign tourists, identified by foreign-issued credit and debit cards, at these establishments rose by 34 percent. Overall spending also saw increases in groceries, mass merchandisers, and hotels, but a decrease in apparel.

Hotel occupancy data from the Greater Toronto Hotel Association showed that for the week ending June 20, occupancy was 72 percent, a decrease from 88 percent in the same week the previous year.

Comparison to other major events

The economic impact of the World Cup in Toronto has been less significant compared to other major events, such as Taylor Swift’s Eras Tour. Sean McCormick, Moneris’s vice president of business development and data services, noted that the Eras Tour led to 90 percent increases in apparel sales and substantial rises at bars and restaurants. McCormick described Taylor Swift as a phenomenon, contrasting it with a Panama versus Ghana match.

Despite many downtown bars and restaurants being busy during World Cup games, the head of Restaurants Canada, Kelly Higginson, questioned whether the city’s role as a host provided a significant boost. Higginson pointed out that on game days, some downtown businesses, particularly those without a sports focus, experienced a decline in their usual traffic due to office closures, and did not attract enough soccer fans to compensate.

Some businesses that were busy during games would likely have been busy regardless of where the games were played, according to Higginson. Many restaurants and bars showing games are busy even when matches are held in Mexico or the U.S., which are co-hosting the 2026 World Cup alongside Canada.

Pedro Antunes, chief economist at Signal 49 Research, offered a more optimistic view, suggesting that foreign spending might have helped stabilize spending in some categories. Antunes acknowledged the possibility of crowding out but noted that the Canadian economy had been weak before the World Cup, with Canada’s opener against Bosnia and Herzegovina on June 12.

Business sentiment and expectations

Studies on the economic impact of large football tournaments have yielded mixed results, with some showing no increase and others indicating up to a three percent rise in consumer spending. Economists suggest that increased spending on World Cup tickets, merchandise, and services might lead to reduced spending on other goods, assuming household budgets remain constant. An overall increase in consumption would require income growth driven by demand for services supporting World Cup activities.

Research from Germany’s Ifo Institute for Economic Research, conducted by Jonas Hennrich and Klaus Wohlrabe, examined the impact of football championships on business sentiment and expectations. Their study, covering eight World Cups and nine European Cups from 1991 to 2024, found that business sentiment does not change in the months surrounding a tournament. However, expectations do.

In the six months leading up to a tournament, expectations tend to be slightly more pessimistic, as companies have not yet factored in the event’s impact. This includes host countries, which incur most of the costs and disruptions. Two months before the event, expectations improve, with predictions of a better economy. This effect is short-lived, with expectations returning to their original level six months after the tournament.

European Cup events have shown a stronger effect on European businesses than World Cups, with improvements in both current sentiment and expectations. These responses are more pronounced for manufacturing firms compared to those in trade or services. The largest jump in expectations occurred when Germany hosted the 2006 World Cup and when it won the 2014 World Cup, despite that event taking place in Brazil. The study’s findings suggest that while firms’ assessments of their current business situations rarely respond to tournaments, expectations can improve for a period after the event, as seen with Canada’s elimination game against Morocco.

Source: thestar.com

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