The return of corporate travellers has pushed up rates at London's hotels according to the latest research from Deloitte.
Properties in the £160-£200 a night range which cater for business and conference guests saw revPAR (revenue per available room) rise by 15% last year.
Airport hotels performed particularly well. Those at Gatwick recorded a similar revPAR increase and operated with fewer than 20% of their rooms on average empty while Heathrow's hotels saw occupancy up by 5.5% to 78.6%.
London's hotels are now operating at nearly 80% occupancy, the firm's HotelBenchmark survey shows. Hospitality partner Marvin Rust says this will make further growth “increasingly challenging”.
He added: “To repeat last year's performance hoteliers will need to carefully manage their customer and distribution channel mix to replace low margin business with more profitable lines.”
Occupancy across London increased by 5% to 77.1%, the average room rate paid rose by £5 to £101 and revPAR went up £8 to £78. But Deloitte predicts a slackening in revPAR growth to 4.1 per cent this year as the impact of 2004's oil price rises is felt among leading economies.
Increasing air traffic suggests it may become increasingly difficult to get a room at busy times. The International Air Transport Association forecasts annual average growth of 6% until 2008.
Shangri-La makes European debut
One of Asia's luxury hotel chains, Shangri-La, is to open its first European property in London in 2009.
It has signed a 30 year leasing deal to run a 195-room hotel in the London Bridge Tower now being built on the south side of the River Thames diagonally opposite the Tower of London.
The hotel which will occupy 18 floors of the 70-storey building is within easy reach of both the City of London and Docklands.