London Hotel Market Spotlight

KEY TAKEAWAYS

• The sample of branded full-service hotels in London recorded an increase in profit during the full year 2024 relative to 2023. GOP per available room (GOPPAR) rose by 5.8% driven by a 1.8% revenue increase, and a decrease in expenses (-1.5%).
• Rooms revenue grew by 2.9%, resulting from a 2.9% rise in occupancy, while ADR remained steady at £280. In contrast, F&B revenue declined by 4%, dropping to £56 per occupied room (POR).
• Occupancy rates increased in May, June, and July by +5.7%, +4.7%, and +4.8%, respectively, compared to the same period last year. This growth was driven by strong demand and limited supply, with 3,053 new rooms added throughout 2024, resulting in a moderate 2.1% increase in total inventory.
• The reduction in expenses was primarily driven by lower utility costs (-£1.6 PAR), followed by a decrease in Cost of Sales, with declines in both the F&B (-£0.62 PAR) and Rooms (-£0.25 PAR) departments.
• The combined effect of increased revenue and reduced cost resulted in a 146% flow-through to the bottom line, increasing the GOP margin from 44.7% to 46.5%.