The supply of luxury hotel rooms in London will increase by more than a quarter by the time of the Olympic Games, research by PwC has concluded.
The accountancy firm estimates that 18 luxury properties are under construction or being planned, adding 2,400 rooms to the capital’s deluxe inventory, a 27 per cent increase. This year will see a flurry of new openings, including first W Hotel in London later this month, the Corinthia in Whitehall Place, due to begin trading next month and the St Pancras Renaissance, which opens in May.
PwC’s head of hotel research Liz Hall said many hoteliers believed these openings would create a “halo effect” on London’s business.
“Many of the hotel operators we have spoken to did not expect to see a significant negative impact on revenues as a result of the new supply opening, although some admitted a 27% increase will impact trading,” she said.
The report also found that some properties in the capital had a much higher suite to room ratio following recent refurbishment. An example is The Four Seasons on Park Lane, where almost one-third of the 192 rooms are now suites.
Development of this kind is being spurred by healthy average prices. PwC estimates that average luxury room rates in 2010 were £254, compared to £228 in 2009. The 2010 luxury rate was exactly double that of the average for all London hotel rooms.
PwC said a trend was emerging for a more informal contemporary luxury product with crossover towards that provided by boutique hotels. Traditional hotels needed to fight this trend, it said, but were succeeding by refurbishing.
A barrier to the luxury sector in London remains with its relatively scarce lack of quality assets, the report concluded. However, it added that this would not put off investors, with many keen to own trophy assets.