Even as the North and Central America World Cup, the largest ever, draws record crowds in stadiums and on TV, shares of beer, hotel, and airline corporations that had expected a tournament windfall are instead falling.
When Brazil, considered one of the world's largest beer consumption markets, and host Mexico were eliminated side by side in the round of 16 on the 5th (local time), shares of AB InBev and Heineken, which derive a large portion of sales from the two countries, fell immediately in European trading the next day. On the day, AB InBev, maker of Mexico's popular beers Corona and Sol, dropped more than 4% on the Brussels exchange. Heineken fell 1.4% in Amsterdam. In the United States, Constellation Brands, which distributes Corona and Modelo, plunged 4.9% on the New York Stock Exchange to close at its lowest since Nov. 20 last year. Ambev, AB InBev's Brazil subsidiary, also fell 2.5% in São Paulo.
Morgan Stanley said in an investor note that with the simultaneous exit of the two soccer powerhouses with large populations, the risk has grown that Latin American beer volumes in the third quarter will miss market expectations. Analyst Sara Simon said in the report, "Beer volumes increase the longer a national team stays in the tournament and the more important the matches become," citing AB InBev, which has a large share of sales in Brazil and Mexico, as the corporations "most exposed."
AB InBev has sponsored the Fédération Internationale de Football Association (FIFA) for 40 years since 1986. Just before the tournament opened, it extended its World Cup official beer sponsorship through the 2030 event. Since last year, the company has identified the World Cup as a key event to lift this year's sales volume and profitability, and it spent large-scale marketing expense focused on Brazil and Mexico. But Brazil lost to Norway on the 5th and failed to reach the quarterfinals for the first time in 36 years since 1990. Host Mexico was also eliminated the same day, losing to England at its home ground, Mexico City's Estadio Azteca.
Morgan Stanley's research team judged that the hit from Brazil's exit would be larger, given that Brazil's beer market is bigger than Mexico's and expectations were higher before the tournament. The team noted that "the incremental growth that would have occurred if at least one of the two teams had won in the knockout stage has disappeared." Experts said that if the two countries had advanced to the quarterfinals, semifinals, and final, watch parties and dine-out and delivery demand—each of which could have occurred up to three more times—also vanished along with beer consumption demand.
Morgan Stanley pointed to the host United States team's performance as the beer industry's last sliver of hope. AB InBev generates about 20% of its revenue in the United States. The report said, "Given the backdrop of being the host and the size of the U.S. beer market, if the U.S. team keeps winning, there could be an upside surprise." But the United States was also eliminated, losing to Belgium in the round of 16 in Seattle on the 6th, erasing the beer industry's final upside factor less than a day after the analysis came out.
Sports brands are also watching the results of the teams they sponsor. According to Reuters, visits to Adidas stores in the United States rose 47% from usual in the first week of the tournament. In particular, the host Mexico team's jersey ranked among the "best-selling national team jerseys," selected by retailer JD Sports. But when Germany, sponsored by Adidas, exited early in the round of 32, Adidas shares fell more than 3% off-hours the very next day. When a sponsored team is eliminated, the period during which that country's jersey can be sold at full price effectively ends, and remaining inventory faces discount pressure. Nike, which supplies jerseys for 12 national teams including Brazil, also lost additional sales opportunities with Brazil's exit.
Hotels and airlines also raised prices expecting a flood of World Cup tourists, but bookings are falling short. With average ticket prices nearing $1,000 per match, compounded by the burden of the United States' strict visa issuance, fatigue from long-haul travel among 16 host cities, and high airfares, overseas soccer fans are canceling trips or delaying reservations until brackets are set. According to a survey by the American Hotel and Lodging Association (AHLA), 80% of respondent hotels said bookings are weaker than initially expected. New York's hotel industry cut its projected World Cup revenue by 60% from earlier forecasts. In some host cities, hotels and airlines are lowering prices to fill rooms and seats.
By contrast, Airbnb, where multiple people can stay in one home and split the expense, saw record bookings. Airbnb boosted supply by offering up to $750 to new hosts in host cities as an incentive. Airbnb shares hit a bottom on the 10th of last month, just before the opening, and have risen throughout the tournament. Notably, on the 2nd of this month, they closed at $148.93, nearing a 52-week high. Even on the 6th, when beer companies' shares plunged, Airbnb traded in the $147–$149 range, near its 52-week high.
Host broadcasters are enjoying a boom of historic proportions. The United States vs. Bosnia and Herzegovina round of 32 drew more than 33.5 million viewers combined on broadcasters Fox and Telemundo, setting a record for the most-watched soccer broadcast in the United States. Telemundo and Peacock, both under Comcast, said the average audience for the first 12 matches was 7.5 million, up 234% from the 2022 Qatar tournament. As the tournament expanded to 104 matches, the number of games for which broadcasters can sell ads also increased. Even if a particular national team is eliminated, broadcasters can keep selling ads with remaining popular teams' matches and knockout coverage.
In sports betting, the box-office success translated into losses. Bank of America estimated that U.S. betting company DraftKings may have lost up to $50 million just during the group stage of this tournament. The Financial Times (FT) reported that a series of parlay bets tying whether popular players like Lionel Messi and Erling Haaland would score with favorite teams' win probabilities kept hitting, inflating the payouts that companies had to make.