Following a strong first quarter (which could be credited, at least in part, to the falling pound), London's hotels are expecting consistently good numbers for the rest of the year. As such, STR and Tourism Economics have lifted their 2017 market forecast for the city.
STR analysts said that hotel performance in the UK capital could reach record actual levels between late June and mid-July. Several major events are poised to bring crowds to the city, including Adele's four-night engagement at Wembley Stadium followed by the annual Wimbledon championships, positioning the market for a 19-day period that is expected to bring both high occupancy levels and average daily rate (ADR).
The Wembley Effect
All four nights of Adele's concert have sold out, and STR analysts project that rates for hotels within reasonable access to Wembley Stadium should spike, following previous summer concerts.
London hotel rates have reached significantly high levels when other major acts have performed at Wembley:
- Beyoncé, July 2016: £152 (6.2 percent higher than the 2016 yearly average)
- Coldplay, June 2016: £170 (18.5 percent higher than the 2016 yearly average)
- Ed Sheeran July 2015: £153 (6.4 percent higher than the 2016 yearly average)
- AC/DC, July 2015: £155 (8.4 percent higher than the yearly 2015 average)
During the two-week tennis championship tournament, London’s hotel rates are routinely much higher than the market’s June-through-August average. For Wimbledon 2016 (June 27 to July 10), London’s ADR was £159. This was 6.4 percent higher than London’s three-month summer average in 2016 (£149).
“London hotels had an exceptional start to the year,” STR forecast analyst Michele Pasqui said in a statement. “The results we’ve seen thus far have in part been a rebound from a weak first half 2016, but more important has been the increased international tourism to the UK due to the pound devaluation. We expect this strong performance to continue through the remainder of 2017, and are projecting a 6-percent increase in demand for the year, which would be the market’s highest rate of growth since 2013. Along with strong demand, inflation is also picking up this year, and we expect London’s ADR to increase by around 5 percent for the full year, which should result in one of the market’s strongest performances for the last five years.”