STR: London's hotel numbers keep growing

London

In spite of overall Brexit concerns and the growing appeal of regional markets, London's hotels are seeing "sharp performance increases," according to STR’s preliminary January 2017 data.

Based on daily data from January, London reported the following in year-over-year comparisons:

  • Supply is up by 2.8 percent.
  • Demand is up by 8.8 percent.
  • Occupancy has grown by 5.8 percent to 70.5 percent.
  • Average daily rate has increased by 5.7 percent to £127.84
  • Revenue per available room (RevPAR): +11.8 percent to £90.08

London’s hotel industry built on its momentum from the final months of 2016. The 70.5 percent absolute occupancy level would be the highest for a January in London since 2008, while ADR would be the highest for a January since 1994. At the submarket level, London’s West End posted particularly high performance levels, with RevPAR up 20.1 percent year over year.

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In December, we noted that London had recorded its strongest month of 2016 in terms of growth with an 8.0 percent increase in RevPAR to £130.33. This was due to a 5.3-percent lift in occupancy to 85.9 percent and a 2.6 percent increase in ADR to £151.65. Notably, in November 2015, the city was affected by a downturn in tourism due to the terrorist attacks in Paris.

Those terrorism fears lasted into 2016 as well. In addition to the demand boost generated by a lower British pound, STR analysts said that the market’s performance increases are all in comparison with a "slightly weak" January 2016, when the market was still struggling from the aftershocks of the terrorist attacks in Paris.

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