According to professional services firm PricewaterhouseCoopers (PWC) there could be a 27 per cent increase in luxury rooms in London by 2012, with around 2,400 rooms in 18 hotels under construction or planned.
PwC said that in a bid to boost profits, many operators were also moving to offer more suites than rooms at their properties.
In the case of the recently reopened Four Seasons on Park Lane the hotel re-opened with fewer bedrooms and more suites – with a suite to room ratio of around 31 per cent (192 bedrooms including 45 suites).
Little revenue impact
Liz Hall, head of hotel research at PwC, said: “Many of the hotel operators we have spoken to did not expect to see a significant negative impact on revenues as a result of the new supply opening, although some admitted a 27 per cent increase will impact trading.
“However, some believed that the re-opening of iconic hotels such as the Savoy and the Four Seasons along with new (for London) names on the scene such as the Shangri-La, Bulgari, the Corinthia, the Rennaissance and W, are expected to provide a positive halo effect, ensuring London continues to compete with the other major cities in the world with top end hotels.
“Demand should strengthen as the Olympics near but hotels will have to be pro-active with their marketing.”
London’s luxury room rates averaged £254 in 2010, compared to £228 in the same period in 2009. The average last year for all London hotels was £127.
Mark Stretton is editor of BigHospitality's sister publication, M&C Report.