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Flat Is the New Growth: 9 Takeaways from London’s Lodging Outlook
Luxury supply is rising, US demand is shifting and a concert can change a city's hotel numbers overnight. Here is what stood out at the Cornell Hotel Society's first London Lodging Outlook.
"Flat is the new growth." Sarah Duignan, Director of Client Relationships at hotel data firm STR, told a room full of leaders planning for 2027 to take that line back to their teams and owners. Her numbers showed why: London is holding occupancy near 80% while absorbing new supply. It may not sound thrilling, but in this market, flat is progress.
The Cornell Hotel Society held its inaugural London Lodging Outlook to a packed house at Virgin Hotels London-Shoreditch, with Virgin Hotels Collection sponsoring the venue. Alison Hargreaves, Senior Portfolio Manager at Archer Hotel Capital, opened the program, followed by welcomes from Will Dowling, who leads hotel origination across EMEA, and Joe Margison, Chief Executive Officer of Virgin Hotels Collection.
Sarah's market outlook was followed by industry trends from Andreas Scriven of Teneo and a look at AI from Dr. Amir Sani of i2ntelligence. I moderated the closing panel with Guy Pasley-Tyler of Archer Hotel Capital, Karen Gilbride of IHG, Guillaume Marly of the soon-to-open Waldorf Astoria London Admiralty Arch, and Liv Gussing Burgess of Luxury Hospitality Consulting. Here are nine things I'm still thinking about.
1. Occupancy in London is steady, but it’s more seasonal than you think.
Year to date through August, London is at 79% occupancy, flat on last year. Its "magic numbers" have held at roughly 80% occupancy and an average rate of about £193 since 2023, and STR forecasts 84% occupancy by 2030.
But the "year-round" city is strongly seasonal. January occupancy has sat at about 67% for three years running, while June and July were standout months for rate. Sold-out nights are rare too. In 2018, London had 30 nights above 95% occupancy. This year it has had two.
2. London luxury now costs 119% more than
In 2019, a London luxury hotel cost about 95% more than the next tier down. Today the premium is 119%. More supply is due by the end of 2027 at both ends of the market, and Guy said the sheer amount of luxury stock makes investors cautious when underwriting. Guillaume offered the long view: people have talked about saturation for all 34 years he's worked in London, yet only a handful of hotels are truly world-class on service.
As someone who covers luxury travel, I find this an exciting moment. Liv noted that the competition forces existing hotels to reinvent themselves to hold their share, and new openings feel the pressure too. The heat is on, and guests will be the winners.
3. Where have the Americans gone?
US arrivals to Europe grew every month from January to May, then dipped as the World Cup kept many Americans closer to home. The UK has had it harder: US arrivals have been below last year every month since March, a slide that started well before the World Cup. Middle Eastern demand is softer too. Sarah's informal barometer is the number of supercars parked in Mayfair, and there are fewer this year.
Liv flagged how exposed European luxury hotels are to US demand, since Americans are their top market, and Guy saw US visitation fall across his markets this summer. The World Cup explains the summer, but not why the UK is lagging the rest of Europe. The November midterms are the next thing to watch.
4. Garth Brooks, Oasis and BTS: music moves markets
We've all heard about the "Taylor Swift effect," but Sarah had the data on other artists. Garth Brooks at BST Hyde Park helped push London to around 95% occupancy on a Saturday. When Oasis played Cardiff last year, the city's average rate approached £450. The day of the week matters as much as the name on the ticket.
Sarah went to see Take That twice this year and admitted she'd never heard of BTS until she saw what the K-pop band did for Brussels: occupancy up 31% and rates up 91% on a Thursday night (though not all of it was down to BTS). She joked that the rush for Cardiff was because Oasis fans weren't sure the band would stay together long enough to play anywhere else.
I didn't expect to laugh out loud during an STR presentation, but Sarah's humor made the point stick. Big events can change demand overnight and are often announced too late for forecasts. STR's London outlook doesn't yet include the new Oasis tour or Harry Styles' return.
5. Tourism taxes have real consequences. Case in point: Amsterdam
Andy Burnham is the latest British prime minister (my seventh in the 16 years I've lived here), and he inherited a Labour government that had already raised employer National Insurance and overseen a business rates revaluation that hit large hotels hardest. His promised 20% rates cut from April 2027 is aimed at pubs, clubs and music venues, not hotels. And according to reports this month, Sadiq Khan has said a London visitor levy will be capped at 5% per night.
Sarah held up Amsterdam as "what not to do when it comes to taxation." Its tourist tax is 12.5% and rising to 20% by 2030, and the Netherlands raised VAT on hotel stays from 9% to 21% in January. Benelux posted the steepest rate decline in Europe (down 3.8% year to date), and STR expects Amsterdam to be one of the hardest-hit markets for rates by year end. For anyone setting 2027 budgets, tax is the line item to watch.
6. Hunt for revenue by questioning old assumptions
With costs rising across the board, Guy noted that F&B margins are still well below pre-pandemic levels. The answer isn't just cutting. It's working out what guests actually value.
Karen urged hotels to question old assumptions, starting with lunch: if few guests want it, does a premium hotel need to serve it? The flip side is spotting what guests will happily pay for. At one Staybridge Suites, the general manager noticed Americans arriving off overnight flights and started selling early check-in with breakfast.
Guillaume is training his Admiralty Arch team to look for the same kind of moment, such as offering to book pre-theatre drinks for a diner who mentions a show the next night. He's also courting locals with approachable pricing (think a £9 glass of wine) and expects about 80% of Café Boulud's diners to be Londoners. Even an extraordinary building has to give people a reason to come upstairs.
7. Guests will trade down on the room, not the experience
Andreas shared Teneo research showing most consumers now see travel as essential, even as the cost of living bites. When budgets tighten, they'll pick a cheaper hotel or flight rather than give up the meals, activities and moments they came for. Still, location, safety and cost decide where people go. Experiences shape what they do once they arrive.
The best experiences are also the hardest to scale. Andreas described talking late into the night around a family's kitchen table on a farm in the Faroe Islands, a world away from choosing between 50 near-identical black cab tours of London. Airbnb, Viator and the big loyalty programs are all betting on experiences. The question is whether authenticity survives at that scale.
8. The talent gap needs more than higher wages
Andreas described a familiar problem on an unfamiliar scale: persistent vacancies, high turnover and younger workers who want more flexibility. It's only going to get worse. The EU birth rate is below 1.4, against the 2.1 needed to sustain the workforce, and as Andreas put it, if AI can't pick up the tasks people no longer want to do, the industry is in real trouble.
For the jobs that need a human touch, Liv asked whether the industry actually has a plan to bring people in and keep them, or whether hotels are simply paying more to move experienced staff from one property to another. Guillaume described hiring early for Admiralty Arch's opening, with around 50 key managers and deputies in place well ahead of time. Karen saw a role for productivity tools that give teams more time with guests.
9. AI is changing discovery before it changes the stay
Amir asked us to look at a hotel the way a potential guest might see it through AI. The answer to "Can I bring my dog?" or "Is there parking?" may come from a mix of hotel descriptions, third-party listings and reviews. If those sources disagree, the guest is confused before ever reaching the hotel's website.
Amir also sees an opportunity inside the hotel. Teams often have automation built into systems they already use, but need better information and clearer instructions to make it useful. His approach is to spot a gap, prepare an action staff can take and check whether it worked. Anyone who has worked in a hotel knows that handing a busy team one more dashboard is unlikely to make their day easier.
The panel took on the bigger question of who will own the guest: brands with loyalty numbers, or the OTAs? Karen noted how fast search habits are changing, while Guillaume and Liv brought it back to the stay. AI can help with research and reporting, but warm, intuitive luxury service still comes from people.
The bottom line
Flat may not sound thrilling, but in a market this full, holding your ground is the growth story.
With thanks to Virgin Hotels Collection for hosting. Cornell Hotel Society events raise money for scholarships. To get involved in 2027 or find out more, message Cornell Hotel Society London on Instagram.
