London is on the brink of a new luxury hotel “gold rush” with destinations offering hundreds of five-star level rooms and suites due to open over the next 18 months.
Hoteliers have been encouraged by the response to the first wave of grand new launches that began last autumn when the Peninsula at Hyde Park Corner and the Raffles London at the OWO in Whitehall became the capital’s first billion-pound hotels.
Fears that they would saturate central London with £1,000-a-night-plus rooms that they could not fill appear to have been allayed by continuing strong occupancy levels and generally robust room rates, despite softening slightly — although only to the still dizzying level of around £900 — over the summer.
Philip Camble, director of hotel sector analysts Whitebridge Hospitality, said that London luxury hotel occupancy rates had strengthened through the first half of 2024 to reach 80 per cent by June, just ahead of 2023. This had been enough to offset the weaker rates so that overall revenue per available room, or Revpar — the key financial yardstick used by the industry to measure performance — had remained solid despite the extra hotels coming on stream. He said: “London is a phenomenal place, it defies the rules that apply to most markets around the world; it’s almost like a different country.
“It just seems able to absorb the extra supply and maintain occupancy at around 80 per cent no matter how much the supply goes up. My forecast at the start of the year was there would be a dip but at the halfway point of the year there has been no material dip.”
Now a second round of five-star launches is underway starting with the first of the current round of openings south of the river. The 203-room Park Hyatt River Thames launched in Nine Elms this month after seven years of planning and construction. It is the first London location for the brand since it pulled out of the Hyatt Carlton Tower in Knightsbridge in 2001.
The next major trophy hotel in central London is likely to be the Chancery Rosewood in the former US Embassy building in Grosvenor Square, by the end of the summer of next year. The 144-room hotel, the only building in London designed by the late Finnish architect Eero Saarinen, will have 10 restaurants and bars, more than any other hotel apart from Raffles London at the OWO. They include a new location for Richard Caring’s Le Caprice, and a first London outpost for New York’s Italian-American eatery Carbone.
Managing director Michael Bonsor said: “Speaking to the other GMs, there is a general consensus that it’s been a very, very positive summer — occupancy has held up. August is always a bit softer and rates have come down a bit but September through to Christmas is always very busy and this year is looking like no exception.”
This will be followed by the wellness-focused Six Senses at The Whiteley development in Queensway in autumn next year. Also due to complete in 2025 is the St Regis London at 21-23 New Bond Street replacing the Westbury Hotel after a £90million refurbishment to create a 196-room hotel promising features such as a “hidden speakeasy jazz bar”.
Rooms with a view
The billionaire Reuben family have two launches in the pipeline that will both be among the most opulent — and expensive — places to stay in central London. Mayfair’s Cambridge House, a Georgian mansion at 94 Piccadilly, the former residence of the Duke of Cambridge and Lord Cholmondley, will be launched as a 102-room hotel towards the end of next year. It will be run by Auberge Resorts, a US operator that has never before had a presence in London.
Shortly afterwards in early 2026 the long-awaited Waldorf Astoria Admiralty Arch — the other Reuben property — will open one of central London’s most instantly recognisable buildings. It is said that the top suite will have views towards Trafalgar Square in one direction and Buckingham Palace in the other with a perfect view of ceremonial processions below.
London is a phenomenal place, it defies the rules that apply to most markets around the world; it’s almost like a different country
Further down the track, Indian hotel company Oberoi is coming to London for the first time by spring 2028 at Mayfair landlord Grosvenor’s South Molton development. The company has signed space at 40-46 Brook Street opposite Claridge’s that will allow for a boutique hotel of around 20 rooms. Oberoi — named this month as the world’s best luxury hotel group — currently operates hotels in India, Indonesia, Mauritius, Egypt, Saudi Arabia and the UAE.
Even more distant is perhaps the most ambitious project of all: the plans to turn the BT Tower into a hotel after it was sold to US operator MCR for £275 million in February.
For some commentators the great London luxury hotel boom is long overdue. Rupert des Forges, head of prime central London developments at Knight Frank, said: “Historically, people might say London has never met demand at the five-star, six-star level.”
Whether the current expansion will be sufficient to fill that gap, or result in five-star overkill, will be seen over the next few years.
