As the disruption of the pandemic subsided, performance in London began to ramp up in the first quarter of 2022, with RevPAR above 2019 comparables for each month from May to July. Like many markets around the world, top-line performance recovery has been driven mainly by ADR, as occupancy was still 5.6% below pre-pandemic levels in July for London and 1% in regional UK.
Occupancy recovery has been consistent across both independent and branded segments on weekends as opposed to weekdays. This aligns with global trends as leisure demand – which is more prevalent on the weekends – has been the primary driver. Occupancy on the books and pickup has shown similar trends in London and regional UK, with independent properties slightly higher as well as weekend spikes.
The expectation is for levels to strengthen as long as there is no further impact from inflation due to the war in Ukraine.
While ADR is a continuing driver of recovery for RevPAR, which is forecasted to eclipse pre-pandemic comparables for major European markets in late 2022 and early 2023, it is expected plateau as occupancy should improve gradually as more demand returns to the market. Full RevPAR is not projected for another few years when adjusting for inflation, however, around Europe and the UK.
