LONDON: It’s poised to take the “crown” from Las Vegas to hotel rooms [γράφημα] – financial postman

The UK capital is about to become the city with the most hotel rooms in the world outside of China, taking the crown from Las Vegas.

With some major hotel developments due to be completed in the near term, it is estimated that London will be able to offer 183,600 rooms in the coming years – an increase of 18% over the current total, according to hotel market data firm STR.

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Las Vegas, which ranks third after top-rated cities Shanghai and Beijing, is expected to see room growth of 8%, and Tokyo of 3%, respectively, according to the number of announced projects.

Of the 27,912 rooms STR has counted and announced in London, 13,455 should open by the end of 2025. There is no fixed timetable for remaining rooms and hotel construction projects are often delayed.

Shanghai, with a population of more than 26 million, has about 346,000 hotel rooms, while Beijing has more than 323,500 rooms, according to STR.

The role of the pound sterling

When the British pound weakened after Brexit, London suddenly became an affordable place for tourists to visit, and the historic city remains one of the most sought-after destinations in the world. London limits short-term rentals like Airbnb to 90 days a year, eliminating competition for hotels.

Now, London hotels are doing better in some ways than they were before the Covid-19 pandemic. In December, for example, the average room rate was £207, up 31% from pre-pandemic levels, although occupancy was 76.8%, which is slightly lower, according to STR.

“It is one of the major cities around the world and will always be a benchmark for the hospitality industry,” said Thomas Emanuel, Senior Manager at STR. “The market continues to perform incredibly well, even when times are tough or economic conditions are not good. London continues to be a beacon.”

Meanwhile, Las Vegas is limited by its success: everyone wants to be in this famous city, and now there is limited real estate. It is only 4.2 miles long and is already highly developed with resorts and casinos.

“Explosion” in luxury hotels

London is experiencing a boom in luxury hotels. Some of the most anticipated hotels include the 190-room Peninsula London by Buckingham Palace, Raffles London at the OWO (120 rooms), the Mayfair Hotel (181 rooms), and the 50-room Mandarin Oriental Mayfair – all set to open in the following months. A room at Raffles, an elegant renovation of an old war office, starts at £1,100 per night.

Americans would be expected to be interested in hotel stays when they came to town for the coronation of King Charles II, but the locals were also strong customers. “There is strong domestic demand,” says Susannah Streeter, head of finance and markets at Hargreaves Lansdown. “People who are facing the cost of living here are coming to the capital instead of spending money abroad.”

One of the largest hotels under construction is a proposed 500-plus-room hotel at Vauxhall Cross Island Towers, a mixed-use development designed by Zaha Hadid Architects. There are also such huge hotels as Park Plaza Westminster Bridge and Hilton London Metropole: each of them has more than 1,000 bedrooms.

On the lower end, budget hotel chain Travelodge has announced plans to open 80 new hotels in the capital. Premier Inn is expanding, too: the chain recently opened a 393-room property in Paddington Basin in central London, as well as a 400-key property in the financial district of Canary Wharf.

“London has the highest number of luxury hotels of any major city, including the largest number of independent luxury hotels,” says Tim Hentschel, CEO of HotelPlanner, noting that London sets the global standard for luxury service.