The average occupancy rate for London hotels increased by 3.4% to 82% in 2024, in line with pre-pandemic (2019) levels, according to new research from Knight Frank.
The company’s latest UK Hotel Trading Performance Review found the average daily rate (ADR) was only marginally down to £228, despite a marked increase in supply, with more than circa 4,200 new rooms added.
The capital’s upper-upscale hotels posted an almost five percentage point uplift in average occupancy to reach 84% and the ADR was on par with 2023 at £239.
The luxury segment saw occupancy rise to 75%, which was still significantly below the pre-pandemic level (79%) and ADR declined by 3.6% year-on-year as a result of an increase in supply.
Across UK regional cities, average occupancy increased to 76%, up from 75% in 2023. Average occupancy is still two percentage points lower than 2019. ADR increased 2.3% to £105 for the full year, which on a like-for-like basis, in real terms, is on par with 2019 pricing.
Regional hotels saw total revenue per available room growth outstrip RevPAR growth for the first time since 2019 due to a strong recovery in leisure, food and beverage spending and a rebound in conferences and events.
Gross operating profit per available room (GOPPAR) in London grew by more than 5% in 2024 – 7% ahead of 2019 – with regional cities, reporting GOPPAR growth of more than 7%.
Philippa Goldstein, senior surveyor and head of hotel research at Knight Frank, said: “UK hotel performance has been resilient in 2024, partly due to an increase in international visitors, major music concerts such as Taylor Swift’s The Eras tour and citywide conferences. Furthermore, advancements in digital insights and dynamic pricing strategies have enabled hotels to maximise revenue growth at peak times.
“However, hotels face constant pressure to boost efficiency, cut operational costs and exceed guest expectations and in 2025 optimising resources will become more crucial than ever. Understanding the role that technology can play will be crucial in driving efficiencies and streamlining operations. We believe the UK hotel sector is well positioned to face these challenges, whilst maintaining the momentum of ongoing growth. Realistic but cautiously optimistic is our stance for 2025.”
