Analysis London calling
According to a recent Newmark report, London’s hotel market is rebounding with strong revenue, renewed investor confidence, and innovative strategies driving long-term growth amid rising operational and regulatory challenges. We look at some of the key findings.
ondon’s hotel market has endured extraordinary challenges in recent years – from a pandemic to political uncertainty, rising operational costs and evolving guest expectations. Despite this, it remains one of the world’s most attractive hospitality markets, driven by strong revenue performance, renewed investor confidence and a willingness to adapt. “London’s hotel sector continues to demonstrate remarkable resilience and adaptability,” says Will Kirkpatrick, head of hotels & extended stay at Newmark UK. Despite shifts in corporate travel, the sector maintains one of the highest global occupancy rates, underscoring its strength as an investment class. Newmark’s latest ‘London Hotels’ report shows key performance metrics have not only recovered but, in many cases, exceeded pre-pandemic levels. The average daily rate (ADR) reached nearly £195 in 2024 – a 26% rise on 2019 figures. Revenue per available room (RevPAR), particularly in the luxury segment, has outpaced inflation by more than 8% since 2015. This robust performance has reignited investor activity, with 2024 seeing the highest volume of UK hotel transactions since 2018. Stabilised pricing and renewed capital flows are fuelling market optimism.
L
Cost pressures and smarter operations Operational pressures, however, remain front of mind. To mitigate rising energy and staffing costs, many hoteliers are turning to technology and efficiency- driven systems. Kirkpatrick recommends limiting daily room cleaning for longer stays, incentivising guests to participate in sustainability initiatives, and investing in occupancy sensors, low-flow water fixtures and smart HVAC systems. Hotels must align with increasingly stringent sustainability requirements while protecting their margins.
Labour shortages and inflation are also driving digital adoption. Paperless check-in, AI-powered chatbots and even robotic housekeeping are being deployed to streamline operations. Yet Kirkpatrick cautions that in the luxury segment, automation must never come at the cost of the personal touch – technology should support human interaction, not replace it. On the regulatory side, the next business rates revaluation could pose significant financial risks. Kirkpatrick advises working with experienced advisers early to assess options and avoid unintended consequences: “A hotel may be under-assessed, and any contact with the Valuation Office could result in an increase rather than a decrease in rates.” Strategic responses include valuation appeals, claiming relief during refurbishments and filing for Material Change in Circumstance where conditions impact trading.
Rise of ‘bleisure’ and adaptive reuse The profile of the modern traveller is changing. With remote and hybrid working on the rise, business and leisure travel are increasingly intertwined. This so-called “bleisure” trend is prompting hotels to rethink design and service offerings. Aparthotels and serviced apartments, such as Wilde by Staycity, are well suited to this shift – combining hotel-like services with home comforts, including kitchenettes and flexible living/ work spaces. To capitalise on this demand, many London properties are expanding co-working lounges, wellness
6
Hotel Management International /
www.hmi-online.com
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31
