London hotel prices are
set to rise by 3.6 per cent in 2025 as rates continue
rising internationally, according to a new report by American Express Global Business
Travel.
However, in the UK and across
the world price increases will be moderate compared to the steep rises of
recent years, thanks to easing leisure travel demand and a surge in new hotel
construction.
Amex GBT’s Hotel
Monitor 2025 offers predictions for more than 80 major cities
worldwide, analysing hotel transaction data and factoring in local and
macroeconomic variables.
London is set to see the
highest rises among the UK and Ireland cities included in the forecast. Other
cities in the forecast include Aberdeen (3 per cent), Bristol (2.5 per cent), Edinburgh (2.5 per cent),
Glasgow (3.1 per cent), Manchester (2.7 per cent), and Dublin (2.6 per cent).
While price rises are mostly
moderate across the globe, there are some noteworthy exceptions:
- New York continues to experience higher rate rises (4.7
per cent) than the rest of North America, in part because of the continued
block on the use of short-term rental accommodations.
- Cities in the Nordics are anticipated to see some of
the highest room rate rises in Europe, as the region looks forward to
improved economic prospects in 2025.
- India’s dynamic economy is fuelling demand for domestic
and international inbound travel, putting upward pressure on hotel rates.
Dan Beauchamp, vice president,
consulting at Amex GBT, said: “Stabilisation in the travel marketplace is good
news for customers, but prices remain high, and challenges persist. Data-driven
decision-making is essential for smarter hotel sourcing, as is effective
communication – maintaining open, ongoing dialogues to build stronger
relationships with suppliers.”
Other trends identified in the report include:
- Supply and demand: While the IMF expects global
inflation to fall in 2025, hotel rates are likely to stay high due to labour
shortages and rising wages. Supply is boosted by a boom in global hotel
construction, with new developments concentrated in the US, China, India,
Canada, and Saudi Arabia.
- Technology is transforming hotel operations and
guest experiences, helping hotels manage labour shortages. AI-powered tools
streamline tasks like room assignments, allowing staff to focus on guest
interactions. Smart room technology is enabling travelers to tailor the
in-room environment to their needs and preferences.
- Retreat to the room: Guests now see rooms as
personalised retreats, driving demand for custom features and wellness
options. Hotels are responding with offerings such as in-room fitness
equipment and workout clothes.
- Sustainability is another key focus, with access
to the relevant data now essential to meeting both traveler and corporate
sustainability goals.
- Extended-stay properties are growing in popularity,
especially in Asia, reflecting demand for flexibility and longer trips.
To read more, download the full Hotel Monitor 2025 report.
