Explore the latest projects from the UK’s commercial interiors industry, featuring the best of workspace, hospitality, living and public sectors.

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London hotel development will be all about luxury in 2022

No signs that Omicron dented the recovery in London’s luxury hotel market, as profits surge at the capital’s top destinations.

15/02/2022 1 min read

Figures from Knight Frank show that despite increased VAT, London hotels delivered their highest level of profitability since the start of the pandemic, with an uplift in travel boosting demand.

By October 2021, the recovery of the London hotel sector was already underway, with occupancy rising 2.6% to 48.2%. Knight Frank data shows steady gains in hotel occupancy continuing, with month-on-month profitability ultimately reaching highest levels London has achieved since the start of the pandemic in early 2020.

Investors are already responding to this growth in the capital’s luxury hotel sector. In the wake of their £4 billion buy, the new owners of Selfridges – Austrian real estate group Signa and Thai retailer Central Group – are reported to be planning a new luxury hotel in the unused retail space at the Oxford Street flagship site.

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.

“The London hotel market is presented with new challenges as it faces the coronavirus pandemic. However, our research shows many reasons for optimism for the sector’s resilience and recovery looking forward into 2022,” said Philippa Goldstein, senior analyst in hotels and leisure at Knight Frank.

“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 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.”

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