The hotel market recovery is set to continue despite the new Omicron variant, according to research from Knight Frank.
It revealed the London hotel sector “steadily” continued throughout October with occupancy rising 2.6% to 48.2%.
The data also showed “steady gains” in hotel occupancy with month-on-month profitability improving by 37%, marking the “highest” profitability levels London has achieved since the outbreak of coronavirus in 2020.
According to the firm, London’s luxury hotels consolidated their “impressive” revenue performance with equally strong gross operating profit per available room increasing by 23%.
Wider hotel demand showed to have been boosted by an uplift in overseas visitors, which supported the ability of London hotels to withstand the 7.5% increase in VAT, with average daily rent for the London-wide market recording 6.6% growth in October – rising to £193.
The firm added that opportunity exists for hotels in strong leisure destinations to seize upon “renewed demand” for short-stay, staycations over the festive period, so long as no new restrictions to domestic travel are imposed.
Philippa Goldstein, senior analyst in hotels and leisure at Knight Frank, said: “The London hotel market is presented with new challenges as it faces the Omicron wave of the coronavirus pandemic. However, our research shows many reasons for optimism for the sector’s resilience and recovery looking forward into 2022.
“Quality leisure spaces for both domestic and international travellers will always be in demand, if the sector can stay nimble and creative in the face of the short-term complications such as Omicron, utility costs and supply chain issues, the sector is on track to continue on its trajectory to recovery in 2022.“