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Occupancy of London hotels fell from 78.9% to 77.4% in April year-on-year, but rose from 75.7% to 76.2% across the UK, as ongoing geopolitical tensions saw overseas tourists delaying or cancelling trips.
Average daily rates of occupied rooms in London rose from £199.95 to £202.29 in April year-on-year, and increased from £137.77 to £140.24 across the UK, according to data compiled by Hotstats and analysed by RSM UK.
Revenue per available room dipped from £157.68 to £156.60 in London but rose from £104.36 to £106.88 in the UK.
Gross operating profits decreased in London from 34.1% to 32.5% in April year-on-year, but remained stable in the UK at 29.6%.
A survey showed 31% of UK consumers changed travel plans by cancelling, postponing, or changing destinations.
The data also showed 27% of consumers do not plan to take a holiday in the next 12 months, compared to 19% before the conflict.
In addition, fuel prices have risen and the energy price cap will increase 13% next month, pushing inflation to 3.5%. Slowing pay growth in the private sector also means real wages will stagnate in the second half of 2026.
Chris Tate, partner and head of hotels at RSM UK, said: “As nervousness around the Iran war drags on, so does the hit to London’s hotel market with some overseas tourists delaying or cancelling their trips to avoid potential travel disruptions. That said, demand in the rest of the UK appears to be holding up as domestic travellers that still want to get away opt for lower-risk options closer to home.
“Uncertainty stemming from the conflict in the Middle East, exacerbated by a rise in airfares, has clearly dented consumer confidence. In addition, over a quarter (27%) of consumers are not planning to take a holiday in the next 12 months, jumping from 19% before the Iran war hit.”
He added: “Looking ahead, the heatwave in May, particularly during half term, should have given the hotel market a welcome boost. Given current geopolitical tensions, consumers are favouring last minute bookings rather than planning in advance.
“So, provided the hot weather continues over the summer, UK staycations may be the preferred holiday option for many. While it’s encouraging to see an uplift in domestic demand, this alone is unlikely to offset the loss of overseas visitors.”
