London hotel occupancy topped pre-pandemic levels for the first time in December, new data shows, as a number of luxury venues opened their doors in the capital.
The RSM Hotels Tracker shows hotels in the capital hit an 80% occupancy rate in the month, up from 78.3% in December of 2019. London’s occupancy rate was well ahead of the 70.1% in the rest of the country.
The average rate per occupied room rose slightly as well, to £234.47, which is also ahead of pre-pandemic levels.
Chris Tate, head of hotels and accommodation at RSM UK, said a lower level of strike-driven transport disruption played a part in the rise.
London's hotel sector saw a number of ultra-high-end openings in the second half of 2023, headlined by the billion-pound Peninsula London.
He said: “It was a positive end to 2023 for the hotel industry, with the London market emerging as the winners. Hoteliers were able to make the most of the festive period, without having to navigate the challenges of train strikes as seen last year.
“As consumers continue to tighten their purse strings and prioritise experiences over goods, the hotel industry is feeling the benefit of this shift in consumer behaviour. Hoteliers are doing well to maintain profits, despite the higher costs being faced by the sector, and it is hoped that this continues after April when costs will increase again, including national minimum wage and business rates.”
Thomas Pugh, economist at RSM UK, added that extra visitors to London “provides hope” that the UK might have avoided an end-of-year recession as strong spending on experiences makes up for weak retail sales.
He added: “‘Looking ahead, the first six months of this year are likely to remain tough with high interest rates dragging on economic growth and inflation remaining well above target. However, things look brighter in the second half of this year. The inflation rate will probably fall to about 2.5%, which will allow the Bank of England to start cutting interest rates. At the same time, real earnings growth will continue to rise and there is the distinct possibility of further tax cuts coming in March. All this would mean more consumer spending, which will be a positive for the travel and hotel sector.”
