For a comprehensive review of the Europe market, click below:
HVS In-Depth Europe Hotel Valuation Index:   2026 | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 | 2001

With a population of approximately 9 million within Greater London (ONS 2023 mid-year estimate) and a wider metropolitan area of around 15 million making it the largest in Western Europe, London remains the UK's dominant urban centre. The city holds second place in the latest Global Financial Centres Index, behind only New York, underscoring its continued pre-eminence as one of the world's leading business and financial hubs. London is home to several world-renowned institutions, such as the British Museum, the Tate Modern and the West End theatre scene. The British Museum was the most visited tourist attraction in the UK in 2024, welcoming almost 7 million visitors. The city also hosts some of the world's leading universities, including Imperial College London, University College London (UCL) and the London School of Economics (LSE). With its rich cultural heritage and international profile, London benefits from a sustained mix of both leisure and business demand.

Following the 2016 EU referendum, the sharp depreciation of the pound against the euro supported an increase in leisure travel from key source markets such as the USA and mainland Europe. However, this was partly offset by a slowdown in business activity driven by economic uncertainty. Post-Brexit, labour shortages have become more pronounced, particularly in hospitality, where approximately 120,000 EU workers left the sector following the introduction of new immigration policies, contributing to a structural skills gap. This has been compounded by tighter visa requirements, with the minimum annual salary threshold for Skilled Worker visas rising to £38,700 in April 2024, while many hospitality roles were removed from the occupation list, further constraining the available talent pool. Vacancies across the sector remain at around 132,000, some 48% above pre-pandemic levels. Several European financial institutions also relocated operations to cities such as Paris and Frankfurt following Brexit to maintain frictionless access to EU markets. Nevertheless, London has retained its global financial prominence, with recent GFCI rankings reflecting ongoing policy efforts to strengthen the sector, supported by deep capital markets, world-class infrastructure and a highly skilled workforce.

London’s hotel occupancy has consistently hovered around percentages in the low 80s, while average rates have shown greater volatility. From 2023, occupancy levels very rapidly recovered but remained approximately 2-3% below pre-COVID levels. Average rates recorded strong growth between 2021 and 2024; however, in 2025 this upward trend stalled, with rates showing a moderate decline in euro terms. That being said, 2025 RevPAR was somewhat aligned with that of 2019 in real terms, despite a growth in hotel supply of nearly 7% over the period. Looking forward, a further 10% of the current supply is expected to enter the market by 2029. The most notable openings will include the 102-room Auberge Collection (Q3 2026), the 114-room Waldorf Astoria London Admiralty Arch (Q4 2026), the 171-room Mandarin Oriental Bankside (Q1 2028) and the 693-room hub by Premier Inn London Trafalgar Square (Q3 2028).

Transaction activity remained robust in 2025 with London overtaking Paris as the most liquid single-asset hotel investment market in Europe, reaching a total of €1.8 billion (£1.5 billion) in volume. This was underpinned by numerous large transactions including the W London in October and the 630-room Novotel London West (€297,000/£254,000 per key) and the Holiday Inn Kensington London High Street (€464,000/£397,000 per key) in December.

Hotel values in London declined by 3.4% in euro terms in 2025, according to our 2026 European Hotel Valuation Index, reflecting softer operating performance and continued cost pressures across the UK hospitality sector.

ADR, Demand, Occupancy, RevPAR, and Supply Projections:

ADR Change
Market Demand Change
Hotel Occupancy Increase/Decrease
RevPAR Change
Market Supply Growth

Change In Value For Market: (€Euro)

London RevPAR Change (€Euro)

London RevPAR (€Euro)

For more information, please contact:

	Sophie Perret, MRICS, MBA Managing Director [email protected] +44 0 7725781037 (m)
	Maxime Gauthier Senior Associate [email protected] +44 0 7593572865 (m)