Almost 8,000 new rooms: London hotel market heading for record year in 2020

London is already home to an impressive 158,956 hotel rooms and according to STR, 2020 will be the year with the highest number of hotel openings London has ever seen.

While guests can rejoice at the ever-expanding selection, hoteliers might see this as a challenge. However, if you play your cards right, a busy market is full of opportunities.

Let’s look at what is happening in the British capital and what hoteliers everywhere can learn from it.

A closer look at London’s booming hotel market

Be it for leisure, business or MICE (meetings, incentives, conferences and exhibitions), London’s popularity just keeps growing. With 56 hotel launches adding 6,845 rooms in 2019 and another 65 openings bringing 7,995 new rooms in 2020, these two years are a record growth period for the city’s hotel market. 

STR, the hospitality industry’s leading benchmarking provider, highlights that this trend has been going on for a while, given that from 2010 to 2020 the city’s hotel room capacity increased by 41%. With 10% of new hotels being 5-star properties, 31% being 4-star properties and 26% in the budget sector, London will continue to cater to a wide variety of audiences. The city’s large, diverse and modern offering of hotels, restaurants and MICE spaces has put it at the top of CVENT’s ranking of Europe’s top MICE cities for the fifth year running.

 

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PwC’s UK Hotels Forecast 2019-2020 predicts how the surge in supply will impact the performance of London’s hospitality sector: “Average Daily Rate (ADR) is forecast to see a marginal lift of 1.3% for 2020 taking the average rate up to £153.40. Overall Revenue per available room (RevPAR) growth is forecast to rise by 3% and 1% for 2019 and 2020 respectively, reaching £128.90 in 2020.” However, due to the larger supply, occupancy is predicted to dip by 0.3%, down to an even 84% for 2020.

 

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In 2019, key openings included The Standard, the Hard Rock Hotel and the W London Leicester Square. Top properties announced for 2020 are The Londoner by Edwardian, the Pan Pacific London and a Rosewood hotel. 

 

How your hotel can win even in a highly competitive market

Stronger competition can lead to downward pressure on rates to secure market share. But that negatively impacts your revenue and only brings limited results. We’ll share with you another approach which can help you win in even the most crowded market.

The key to making your hotel stand out is to provide extra value through personalised offers and services guests can customise their stay with. This enriches their experience at your property and boosts revenue at the same time by increasing the value every guest has for the hotel. 

“Ancillary revenue from upselling is exceptionally important to us and I think it can be done in a way that pleases the guests and the business because we can enhance what the guest is buying or using during their stay,” explains Clinton Campbell, Commercial Director at Apex Hotels.

 

 

This is a win-win situation because guests can create exactly the stay they want, and you generate ancillary revenue for the extra goods and services you offer at your property. 

With the world’s leading destinations becoming more and more competitive, personalisation and curated offers are the future.

Using the right tools to help you effectively create and promote personalised deals is the best way to ensure you reach all your guests and maximise both their experience and your results even in the most crowded markets.