Rotorua had been invited by the UCI to make a bid as back-to-back Australasian rounds would have made it financially viable for organisers and competitors to come to New Zealand.
But, without an Australian round in 2015, the UCI decided it was no longer feasible to bring the event to Rotorua.
Mr Donaldson said the UCI encouraged Rotorua to remain as a bidder for the 2016 and 2017 rounds when Australian hosts are understood to be confirmed.
He said he was extremely proud of the "Rotorua Inc effort" in preparing and submitting a bid, supported by BikeNZ, at short notice.
He highlighted the work of Rotorua District Council events manager Martin Croft and interim event director Tak Mutu, who had contributed many hours of unpaid work to the bid.
"This work is not necessarily wasted," Mr Donaldson said.
"There remains strong potential for Rotorua to host UCI MTB world cups in 2016 and 2017.
"BikeNZ has expressed their support for that and there is now a lot less pressure around preparations.
"I'm sure the wider mountain biking community of New Zealand will share our disappointment in not getting to host the UCI in 2015.
"However, we know Rotorua is still well-placed to showcase its position as the Southern Hemisphere's premiere mountain biking destination through our fast-growing and popular annual Rotorua Bike Festival."
Mr Donaldson said an economic impact report produced after the 2006 UCI World Championships event in Rotorua estimated a $12 million boost for the local economy and he predicted, if Rotorua was successful, each event would bring at least the same amount, if not more, into the city.
But, all is not lost, according to Mr Mutu.
"While it's a blow for us, we are very excited by some major developments in the pipeline and we look forward to being able to say more about that in the near future."
