In 2023, year-over-year comparisons regained significance, particularly after the first quarter when Omicron comparables were no longer a factor. Notably, independent properties in London consistently outperformed across top-line metrics for the first eight months of the year, a trend mirrored by branded properties, with a more pronounced increase in average daily rate (ADR). The Regional UK market also experienced yearover- year growth, albeit more modest, particularly in independent properties when examining ADR. Brands in this market seem to have achieved a more balanced growth between occupancy and room rates. It’s crucial to highlight that STR estimates that approximately 4–5% (equivalent to 30,000– 35,000 rooms) of the Regional UK’s 714k-room inventory are currently in use for humanitarian aid. Interestingly, the impact on occupancy is relatively muted, given that many of these properties historically have lower occupancy rates and have not actively participated in STR benchmarking.

Day-of-week patterns and recovery trends

Day-of-week patterns indicate general similarities between independent and branded properties, but differences emerge when assessing recovery to 2019 levels. Shoulder days (Sunday and Thursday) yielded the most significant occupancy gains for independent properties throughout the year. However, shoulder levels dipped during the summer, while weekends (Friday/Saturday) gained momentum. Weekdays (Monday to Wednesday) and primarily those aligned with corporate demand experienced substantial recovery early in the year but took a step back during the leisure-heavy summer months. In contrast, branded properties did not exhibit the same weekend momentum, mostly levelling off during the summer. Moreover, weekday occupancy in branded properties has maintained consistent recovery levels since May, distinguishing them from independents.

Analysing segmentation data reveals that transient demand (bookings of less than ten rooms per night) is firmly in recovery territory in both London and the Regional UK market. Notably, groups (ten or more room nights) show momentum in the Regional UK market but lags significantly behind in London.

Outlook for London and the Regional UK market

London continues to be a sought-after destination for both domestic and international demand, with a substantial return of the latter during the summer, attributed to Americans traveling to Europe. Although leisure demand is softening, the improvement in the corporate segment is expected to sustain growth into 2024. In the Regional UK, projected occupancy gains are supported by anticipated longer-term economic improvement across the UK, encompassing cooling inflation and rising GDP growth from 2025 to 2027. Expectations for longer-term ADR growth have improved as economic headwinds have moderated, with rates unlikely to reset or decline.