Budget rooms set to muscle in on London hotel profits

London hoteliers' earnings will soon be affected by the growing influx of branded budget accommodation, specialist estate agent Knight Frank has warned.

The firm's London hotels partner, Paul Bartrop, said that while budget hotels made up around 13% of the market on the Continent, they only took up 4-5% in London.

But this was about to change, with plans for a Travel Inn in the capital's County Hall, and several sites being mooted for Holiday Inn Express and Travelodge hotels.

These hotels would be able to offer lower prices and high standards, with plenty of money for advertising, Bartrop said. What's more, the trend toward such premises would accelerate.

He added that the strong pound had already forced down tourism and occupancy levels, with traditional tourist and backpacker hotels being hit the hardest.