The hotel industry in London is expected to grow in the short to medium term, outperforming other cities in Europe. This is one of the predictions made by Jones Lang LaSalle Hotels, with the organisation highlighting the strength of the city's market ahead of the Olympic and Paralympic Games, which start on Friday (July 27th). Europe, Middle East and Africa chief executive officer at the firm Jon Hubbard said the London hotel market will be boosted by the city's economic growth, which is more robust than many other European destinations.
However, Jones Lang LaSalle Hotels cautioned the trading environment will be tougher for hoteliers in the UK in 2013, following a year where occupancy levels and room rates have been bolstered by the international sporting event. The organisation pointed to the anticipated 4.8 per cent increase in the supply of hotel rooms next year, as well as strong competition in the budget sector as two factors that may hold back the market. According to the latest report from STR Global, the UK had the largest number of hotel rooms under construction in Europe in June this year - with 8,743 new rooms set to come online in the coming months. Russia, Germany and Turkey are the only other nations where more than 4,000 new rooms are currently in the pipeline, the report noted.
Mr Hubbard commented: "London has proven to be a very resilient market, with hotels posting annual RevPAR (revenue per available room) growth of 5.8 per cent during the last five years despite a financial and economic crisis in 2008 and 2009." He added that, although reduced RevPAR growth is expected in 2013, London's hotel sector will still be "robust" in comparison to other destinations in western Europe. This indicates hotels in the UK's capital will continue to be an attractive real estate investment option in the medium term.
- Wednesday 25 July 2012