Sports attractions fuel capital's hotel boom

Average cost per night of a room in London is €182

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London is in the midst of a hotel boom as a growing economy and events such as this year’s rugby World Cup push occupancy rates to their highest levels for 20 years.

It comes despite a huge number of new rooms that are set to open this year from new developments. Research by PricewaterhouseCoopers, released today, shows that an additional 6,430 net new rooms could open in London, taking the total supply to more than 136,000.

Despite this the consultancy expects occupancy rates in the capital to be 84.3 per cent, followed by Edinburgh at 81 per cent and Paris at 80.3 per cent. All three cities should see further growth in 2016, albeit at a slower pace.

The strong demand is helping to drive revenue per room, which is expected to grow at more than 4.5 per cent a year.

Despite its reputation for high prices, the capital is not the most expensive European city in terms of cost per room. In euro terms the most expensive city based on average daily room rate is Paris at €257 (£187), followed by Geneva at €232 and Zurich at €193. London follows with €182. Rome averages €143, after which come Milan (€131) and Amsterdam (€125). In 2016 all cities, bar Geneva and Zurich, are set to see further growth, although the rate of increase may be marginal in some.

London’s hotel boom is a reflection of the capital’s ability to attract high-profile events, with the rugby World Cup alone set to bring thousands of visitors in.

The NFL’s three-game international series is also due for a repeat this year, including the first intra-divisional game to be staged outside the US at Wembley Stadium.

Investment is also bringing capacity on stream in the rest of the UK, where growth is set to run at about 2 per cent. Cities with the most active room pipelines after London are Manchester, Edinburgh, Birmingham, Aberdeen, Glasgow, Newcastle, Liverpool, Cambridge and Bath.

Overseas investment remains high, particularly from Asia.