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

London has developed into one of the world’s leading business, financial and cultural centres, and the city’s influence on politics, education, media, fashion and arts contributes to its status as a major global city. As one of the main financial hubs in Europe, and with its rich cultural heritage, London benefits from both leisure and business demand.

After the pound sterling depreciated significantly against the euro in 2016 following the EU referendum, London benefitted from increased leisure travel from source markets such as the USA and Europe. However, that was counterbalanced by decreased business activity due to the uncertainty in the market. Up until the negotiations for the withdrawal agreement were concluded in December 2020, the market experienced some uncertainty in terms of investment activity but also on the free movement of people, as this economic freedom largely impacts the payroll costs of UK hotels and the accessibility of each other’s markets to UK and European investors.

During 2018, occupancy levels increased and allowed London to finish the year with its highest annual occupancy level of the past decade, despite a slight dip in international arrivals. In 2019, arrival figures grew again to similar levels achieved in 2017 (approximately 34 million), while occupancy remained stable and average rate gained nearly 3.0% compared to 2018. Arrivals grew at an annual compound rate of 6.1% between 2010 and 2019, driven by domestic and international visitation alike. Following the pandemic-induced decline in 2020, demand started to strongly recover from the summer of 2021 with the easing of international travel restrictions. However, performance remained below pre-pandemic levels overall, with RevPAR standing at 35% of its 2019 level, due to the lack of international demand and large events. In 2022, the London market returned to pre-pandemic levels in terms of RevPAR, mainly driven by an increase in average rate of 21.0% above 2019, while occupancy remains in recovery at 83.0% of 2019 levels.

Supply in London currently stands at close to 1,500 properties comprising almost 140,000 rooms. There are currently 50 properties in the pipeline for London, all expected to open by 2027, an increase of 3.5% on current supply. These hotels will bring nearly 4,900 new rooms to the market. Some prominent new openings include the 357-room Art’hotel London Hoxton, set to open in May 2023, and two Adagio aparthotels opening in Whitechapel in November 2023 (147 rooms) and Hammersmith in 2027 (240 rooms).

Transaction levels in London, like most other European cities, were subdued in 2020. However, investment activity and the number of transactions started to increase in London in the second half of 2021 and throughout 2022. The most notable transactions were the sale of the 405-room Hilton London Olympia for a reported amount of €154 million (€381,000 per key), the 131-room The Trafalgar for around €154 million (€1.2 million per key) and the 283-room The Dilly Hotel for €104 million (€369,000 per key).

2022 London hotel values increased by 4.5% in euro terms and 3.7% in local currency, as reported in our 2023 European Hotel Valuation Index.

 

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

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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 2078787722 (w) +44 0 7725781037 (m)