It was announced this week Dunedin would host the England v Argentina clash on September 10, meaning four games - three involving the England team and its travelling fans - would now be held in the city.
Terrace Bar owner John MacDonald said that meant extra pressure on the city's hospitality industry.
The city had licensed space for a maximum of 5000 people at any one time, but twice that number were expected to try to cram into bars on match days in Dunedin.
He and fellow Octagon bar owner Phil Ellis have written to city councillors and Dunedin Mayor Dave Cull, urging them to reverse a council decision to prohibit marquees from the Octagon during the tournament.
The council decided last month to allow smaller gazebos outside Octagon bars, but not larger enclosed marquees used previously, and was quick to rule out any change after Mr MacDonald objected.
The council wanted to protect the Octagon for other activities alongside the bars, Mr Cull said at the time.
Yesterday, Mr Cull said the decision would not be reversed, despite the addition of another England game.
Instead, the council was in discussion with the wider Dunedin hospitality industry about plans for the tournament, which could include creating alternative "hubs" in other parts of the city, such as George St, Roslyn and St Clair, he said.
The council recognised the city faced an accommodation and hospitality "capacity issue", he said.
"The accommodation we'll have to deal with probably regionally. Dunedin will be full and I think some people will stay out of town.
"The hospitality one, while we recognise there's a capacity issue, we don't think putting beer tents across the road in the Octagon is the answer to it.
"We've got some really good areas in town, like Roslyn and St Clair, which have lovely ambience, good views [and] clusters of cafes. I think that will be part of a solution to the capacity challenge."
Cr Bill Acklin suggested the town hall, run by a private operator, if available, should be considered as a venue for those unable to fit into city bars.
He said he missed last month's vote, was not opposed to using marquees in the Octagon, and wanted the city to do something extra to "alleviate a certain amount of congestion".
"In the CBD, we're not even going to be able to host maybe a quarter of the people that there may be floating around. What I'd hate to see is 5000 people ... basically not being able to fit into any licensed premise."
Cr Andrew Noone said the council's position was to support a city-wide approach, rather than focusing on the Octagon alone.
The Forsyth Barr Stadium's lounges would also help soak up some of the pressure on other venues, with people staying on at the stadium after matches, more than had happened at Carisbrook previously, he said.
