London certainly has no shortage of posh hotels, but an influx of
high-end openings is poised to catapult the city's luxury sector to new
In the latter half of this year alone, London is preparing to welcome
the Raffles London at the OWO, the Peninsula London and the Mandarin
Oriental Mayfair, which will be the second Mandarin Oriental in the
That's on the heels of the eco-conscious 1 Hotels making its European
debut this spring: It chose to plant its flag in London's Mayfair
And even more luxury inventory is coming down the pipeline. Six
Senses, Waldorf Astoria, Rosewood, Park Hyatt, St. Regis, Oberoi, Alila
and Langham all have plans for London hotels to open over the next few
years. Mandarin Oriental has even made plans for a third London outpost,
on the city's South Bank, by 2028.
Thomas Emanuel, a London-based senior director at STR, called such an
extensive roster of luxury openings "a bit of an anomaly" in a market
like London's. This level of rapid high-end expansion is more typically
seen in newer or developing global hub markets like Dubai or Riyadh and
Jeddah in Saudi Arabia, he said.
"This is quite unusual for a very established market that has been a
global hub for many, many years, like a Paris, New York or Tokyo," he
said. "The pipeline is significant, and it's really a 'who's who' of not
just luxury but top-end luxury lodging."
The Peninsula Landon is opening in September 2023.
London is a bucket-list destination
Part of London's appeal for luxury development is its healthy demand
mix. The city attracts ample corporate, group, conference and leisure
travel and enjoys strong connectivity, Emanuel said, adding that the
city is "always on people's bucket list".
And the flurry of high-end investment comes as London's luxury
hospitality sector makes solid progress on pandemic recovery with
exceptionally robust rate growth helping to offset more modest occupancy
According to STR data, London's ADR is 36.7% higher this year than in 2019.
"That's far outstripping inflation, and luxury rates recovered far
more quickly than other classes," said Emanuel. "Luxury has really been
leading the rate charge."
Although Emanuel said that London's high rates have potentially
started to hit a ceiling, they don't look likely to drop any time soon.
"We expect small growth or for things to flatten, but the rates that we're achieving now are here to stay," he added.
A guestroom at the 1 Hotel Mayfair
Martine de Geus, director of marketing and communications at the
Beaumont hotel in Mayfair, said that London's high-end hospitality
sector has enjoyed relatively high demand this summer.
"Our June has been extraordinary, and our July has also been looking
pretty strong," said de Geus. "The market has been incredibly buoyant."
The 72-room luxury property is in the midst of an expansion; it
recently acquired a nearby building that will soon house 31 rooms after
an extensive refurbishment. The project, on track to be fully finished
by the holiday season, follows a propertywide revamp that included an
extensive refresh of the Beaumont's ground-floor public spaces and
With these updates, de Geus said the Beaumont is even
better-positioned to compete for upscale travelers as London's luxury
sector gets significantly more crowded.
"We have a very distinct niche in the market," said de Geus. "I'm
sure people will want to check out the Peninsula and the Raffles and so
forth. But they are all big brands at the end of the day. We have that
'grand hotel' [feeling], but we remain a small, intimate property, and
there's an audience that wants that."
De Geus said that London's busy events calendar will help keep luxury
demand high, citing annual happenings like the Wimbledon tennis
tournament, the Frieze Art Fair and the London Design Festival.
Sam Jones, director of sales and marketing for the Nobu Hotel London
Portman Square, which opened as London's second Nobu hotel in 2020,
similarly believes there's plenty of demand to go around.
"London's really busy these days," Jones said. "And people are
staying longer. In my experience, the average length of stay for most
London hotels [prepandemic] was maybe two nights. But we're seeing an
average length of stay of more than three nights now."
Meanwhile, STR's Emanuel views the city's spike in high-end hotel
investment and expansion as "a vote of confidence" in London's future.
"These are developers and brands that know what they're doing, and
they want to open in markets where they believe they can make money,"
said Emanuel. "And London is one of those few truly global cities that
will always have a plethora of demand drivers."
Source: Travel Weekly