World Cup markets show strong construction activity
INTERNATIONAL REPORT — As the 2026 FIFA World Cup approaches, hotel development activity around the 16 host cities across the United States, Canada, and Mexico continues to flourish, according to Lodging Econometrics data.
LE compiled data on new construction, renovation, and conversion projects scheduled to open in 2026 within a 20-mile radius of each stadium. The overall construction pipeline, including renovations and conversions, exceeds 150,000 rooms across all markets combined.
“Many cities have seized this opportunity to embrace a global trend: building hospitality and entertainment districts around sports stadiums,” said Bruce Ford, senior vice president and director of Global Business Development for LE. “With numerous new brands and nearby convention centers, this approach is a natural fit for the right developers.”
The World Cup, scheduled from June 11 to July 19, will be the largest in history, featuring 48 teams and 104 matches across three nations simultaneously.
Dallas leads US development
Among U.S. host cities, Dallas leads with 154 new construction projects, totaling 20,067 rooms. The market is benefiting from the recent opening of Texas Live, which is adjacent to AT&T Stadium in Arlington, which added 1,200 rooms in 2024 and 2025. Looking ahead to 2026, Dallas expects 24 new projects totaling 2,691 rooms, while 30 renovation and conversion projects will add 6,241 rooms to the market.
Miami follows with 109 new construction projects representing 19,722 rooms within a 20-mile radius of Miami Stadium. Nine new-build projects are forecasted to open in 2026, delivering 2,369 rooms.
New York/New Jersey, host of the July 19 World Cup final at MetLife Stadium in East Rutherford, New Jersey, shows 71 projects with 12,037 rooms in construction, with extreme renovation activity featuring 39 projects representing 9,389 rooms. Ten new properties are forecast to open in 2026, adding 2,007 rooms to the inventory.
Los Angeles presents healthy new construction numbers across both the Coliseum (75 projects, 13,964 rooms) and Rose Bowl (64 projects, 12,372 rooms) markets. The San Francisco Bay Area's Levi's Stadium market shows 31 projects with 4,983 rooms in construction, though only two new properties totaling 210 rooms are forecast to open in 2026. Additionally, Seattle has 18 new construction projects accounting for 2,719 rooms.
Atlanta's market features 65 new construction projects with 9,001 rooms, including the 976-key Signia by Hilton, which opens directly across from Mercedes-Benz Stadium in 2025. Houston shows 45 projects with exceptional renovation activity. In the Boston area, hotel construction around Gillette Stadium totaled 15 projects and 2,254 rooms, with 2 projects and 156 rooms scheduled to open in 2026, while Kansas City and Philadelphia round out the U.S. markets with steady pipelines.
Canada, Mexico show steady activity
Toronto Stadium's market leads Canadian hotel construction with 63 projects and 10,786 rooms, the highest project count among all host cities in Canada. Seven new properties are forecast to open in 2026, totaling 1,262 rooms, while 11 renovation and conversion projects will deliver 4,473 rooms.
Vancouver's BC Place market shows 31 new construction projects with 5,383 rooms. Five new builds are expected to open in 2026 with 664 rooms, and two renovation projects will add 274 rooms to the upgraded inventory.
Among Mexico's three host cities, Guadalajara features 26 projects with 3,000 rooms, while Mexico City's Estadio Azteca, which will host the tournament's opening match on June 11, shows 25 projects representing 2,861 rooms. Monterrey's market has 13 projects totaling 1,591 rooms, with vigorous renovation activity.
With the tournament still months away, development activity continues to evolve. The 2026 forecast openings represent properties already under construction or in advanced planning stages. Markets with direct stadium-adjacent developments or those hotels nearby hope to see particular benefits from their proximity to these venues, commanding premium rates not only during World Cup matches but also for year-round events these stadiums host.
NATIONAL REPORT – Most hotel owners assume their biggest operating costs are immovable. Labor rates rise with the market. Insurance premiums continue climbing. Utilities fluctuate with little predictability. In a margin-tight environment like 2026, owners feel they have limited control over the forces shaping their bottom line.
But there is one major expense that is far more controllable—and far more profitable to manage—than most owners realize: property taxes.
Property taxes are appealable, adjustable, and frequently misaligned with a hotel’s true market value. More importantly, they represent one of the only remaining levers that can meaningfully and directly increase NOI in a cooling performance cycle.
And unlike most operational initiatives, a successful property tax strategy doesn’t require additional guests, additional labor, or capital reinvestment. It delivers pure profit.
CBRE’s U.S. Hotel Monthly Trends dataset for September 2025 shows a clear pattern emerging across U.S. hotels:
- Occupancy declined 3.3% year-over-year
- EBITDA fell –3.7%
- Gross Operating Profit declined –2.3%
- Total operating revenue increased only +0.4%
- During the same period, property taxes increased +3.1%.
With ADR nearly flat (+0.3%) and RevPAR suppressed due to weakened occupancy, many hotels are producing lower income than their assessments imply.
This widening gap—falling profitability versus rising property taxes—creates immediate NOI pressure. But it also creates a powerful opportunity. When expenses move in the wrong direction while performance softens, owners finally have a strong basis to challenge their assessments.
Why property taxes drift
To understand why taxes rise during downturns, owners must understand the assessment cycle. Hotel assessments rarely move simultaneously with real performance. Instead, they are updated on multi-year cycles, and many jurisdictions rely on outdated financials, mass appraisal techniques, or valuation models that unintentionally include non-taxable components.
Hotels experience material income volatility tied to seasonality, ADR shifts, group cycles, and management turnover, yet assessments often fail to reflect these real-time variations.
Two things happen as a result:
- Brand/flag value
- Management agreements
- Workforce in place
- Reservation systems
- Operating systems
- Franchise fees
Flag changes, management contract renegotiations, and operator transitions create intangible business value that must be removed from taxable assessments.
None of these are taxable real estate. These inclusions can inflate assessed values by a significant double-digit percentage.
For an owner, this isn’t an academic issue—it translates directly into a tax bill that is higher than it should be.
Revenue decline creates opportunity
The September 2025 data also shows that hotel performance differs sharply by property type:
- Resort hotels: GOP +17.5%
- Convention hotels: GOP +0.6%
- Full-service hotels: GOP –3.9%
- All-suite hotels: GOP –2.2%
- Extended-stay hotels: GOP –5.2%
- Limited-service hotels: GOP –9.0%
(CBRE Monthly Trends, September 2025)
This mismatch is exactly where appeals win.
How this actually increases NOI
Here is where the conversation stops sounding like “homework” and starts sounding like money.
A 20% reduction is not uncommon when intangible business value has been mistakenly included in the assessment—and it delivers a direct NOI increase.
The Divergence: Your tax bill rose while portfolio occupancy fell.
The ‘Copy-Paste’ Valuation: Your assessor is using mass appraisal metrics rather than hotel-specific income capitalization.
The Intangible Trap: A recent flag change or brand renovation triggered a higher assessment (implying they are taxing the brand, not the building).
Cap Rate Lag: The jurisdiction is using cap rates from 2021-2022 that do not reflect the 2025 cost of capital.
Expense Blindness: The assessment model ignores the spike in insurance and labor costs, overestimating your Net Operating Income.
Here’s an example: A 200-room full-service hotel with $15 million in annual revenue has a $1.8 million annual property tax bill. A 20% reduction equals $360,000 in NOI added back, every year. Capitalized at an 8% cap rate equals a $4.5 million increase in asset value.
There is no operational initiative with that level of impact and that low of a cost.
And for owners preparing to refinance, market their property for sale, or stabilize margins, this NOI lift can materially change financial outcomes.
From compliance to arbitrage
Successful tax management at the portfolio level moves beyond simple compliance. It requires a Valuation Arbitrage approach—proving that the assessor’s underwriting assumptions differ from market reality.
Why market intelligence wins
In property tax appeals, information asymmetry determines the winner.
Local assessors operate with limited data—often relying on outdated sales disclosures or generic market surveys. The most effective counterstrategy leverages Institutional Data Scale.
The 2025 operating environment is defined by rising costs and softening demand. In this cycle, yield must be manufactured, not just managed.
Property tax strategy is a controllable, high-impact lever. It is appealable. It is scalable across a portfolio. And, with the right data, it is highly winnable.
In a market where revenue growth is hard to come by, property tax reduction is the “hidden profit center” waiting to be captured by investors who treat tax liabilities as a variable, not a fixed, cost.
Contributed by Mona Govahi, director of Property Tax Practice & National Business Development, CBRE, Houston
Mixed opinions on whether groups still deliver
HIT advisory board sounds off on 2026 perceived performance strengths and weaknesses – from group to BT and leisure transient.
NATIONAL REPORT – After multiple 2026 forecasts have suggested economic uncertainty will create a softer travel environment, where will owners find upside performance in 2026? Will it be strength F&B, group, small meetings, ability to drive rate in the luxury space?
Analysts at Truist Securities recently wrote that the transient segment will likely see the most growth in 2026, whereas the group segment will be the weakest with occupancy down low-single digits year-over-year and ADRs up low-single digits. At the moment, transient customer RevPAR looks to be up low-to-mid single digits for 2026 and reflecting the continuation of bifurcation/k-shaped trends, the upper-end will be closer to up mid-single digits year-over-year with the more mass-market customer closer to up low-single digits.
Hotel Investment Today asked its advisory board members for their takes on perceived strength in performance for 2026 because self-help can only go so far.
“Business transient is projected to show continued recovery as corporate travel budgets stabilize- leisure transient will remain an important contributor, though growth is expected to be more moderated.
“With tighter compression from group, we expect to yield out lower-rated discounted leisure and strengthen ADR across peak periods.”
“The group segment seems to be doing well. Our group bookings, particularly at larger group-oriented hotels, have remained strong, while corporate demand growth has been slow. Leisure has tapered off, partly because the pandemic-era/post-pandemic leisure travel is over. But this segment is also impacted by a decline in in-bound international travel, which is caused by both the current political environment (most impacted are gateway cities that have traditionally enjoyed international visitation) as well as the strong U.S. dollar relative to other currencies (glaring example is Hawaii with the Japanese traveler).”
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