The London Hotel Industry Starts Picking Up Steam Again

Of all the major global cities and transportation hubs, London was among the hardest hit by the COVID-19 pandemic, as lockdowns and other restrictions left the capital of the United Kingdom largely devoid of office workers and international travelers. But now the city is showing robust signs of recovery, despite the recent blip resulting from the omicron variant.

Speaking on a webinar titled “London hotel market: What’s next” hosted by business advisory HVS, Peter Anscomb, senior corporate director at Edwardian Hotels, said the recovery has started though not all pandemic-era restrictions have been lifted. His company opened the luxury hotel The Londoner in the city in 2021.

He noted the U.S. Centers for Disease Control & Prevention still has the U.K. listed at Level 4, signifying a “very high level of COVID-19.” He said one urgent requirement is raising the confidence of event and corporate event planners that they can once again book London hotels.

Hoteliers in London are optimistic and see good signs developing, such as longer stays and little guest resistance to rate and cost increases.

“Last year was strong. Rooms were at 55% [occupancy compared with] 2019, F&B 65% and, amazingly, our spa, almost a small hotel in its own right, at 80%,” said Michael Izzo, the London-based chief financial officer of Corinthia Hotels, speaking of the company's London property. “Week on week, day by day, we see demand coming back in, and I think the rebound will come in very quickly,” he said.

David Orr, CEO of Resident Hotels and co-founder and chairman of Urbanist Hotels, and Edwardian’s Anscomb sounded more of a cautious note. Orr said forward bookings are occurring in a “semi-normal pattern.”

“We are ahead of 2019, but we should not over-read into that. We’ll all come to a conclusion as to our business-model strategy when the markets fully open up,” he said.

The focus for the London hotel market is on occupancy as workers and tourists slowly return, he said. Optimism also comes from average daily rate holding up. The return of trading and the retention of economic fundamentals provides room for innovation, panelists said.

New luxury hotels are coming to the London market, including the Raffles London at the Old War Office and Admiralty Arch, which will join those opened during the pandemic, such as The Londoner.

Leicester Square, just around the corner from the Corinthia, is not a traditional spot for a luxury hotel, but it was the site chosen for The Londoner.

Source: CoStar