London's high barriers of entry make it a difficult city for hotel investors and develops to maneuver in, but if you do get a project off the ground, you're bound to have a pleasant ROI. That's because London continues to be a draw for leisure and corporate travelers, and in spite of its own difficulties with terrorism, remains one of Europe's smarter cities for investment.
London’s hotels and other accommodation recorded more than 56 million overnight stays in 2016, topping Europe’s charts and growing 7 percent year-over-year. According to European Cities Marketing, 41 million of those stays were from international visitors—strong evidence of the city's appeal for global travelers. Travelers from the U.S. made 2.1 million trips to London last year for nearly 12 million overnights.
As of January, London has more than 15,000 rooms slated to open in the coming year, and more than 140,000 guestrooms in the long-term pipeline. While investment in hotels has traditionally focused around London’s central areas, new infrastructure improvements and a booming digital economy has created a “Knowledge Corridor” from Bloomsbury to Paddington, taking in Fitzrovia and North of Oxford Street.