There is concern that around 7,000 hotel bedrooms are due to open this year in London, following on from a decline in occupancy for four consecutive quarters.
The number of new bedrooms set for 2016 in the capital are more than double the number that opened in 2015 and account for nearly half of the 16,000 bedrooms that are expected to launch across the UK this year, according to the Hotel Bulletin: Q2015 report from AlixPartners, AM:PM, HVS and HotStats.
Last year saw the opening of 10,000 new bedrooms across the UK.
"Even London hoteliers, used to robust performance in almost any conditions, may be concerned by this large impending increase in supply given recent limited demand growth in the city," the report highlighted.
In the fourth quarter London's hotel occupancy fell by 2%, compared with the same period in 2014, despite hosting Rugby World Cup matches in October including the final. The period's figures were weakened by a poor December performance, which recorded a 9% fall in revpar, year-on-year.
Fewer visitors travelled to the city for Christmas shopping due to safety concerns following the terrorist attacks in Paris in November and an increase in online shopping activity.
Across the UK, occupancy levels fell in eight of the 12 cities studied in the Hotel Bulletin. However, rate rises mitigated the impact of this, resulting in overall average revpar growth of 2%, year-on-year.
"Flat or declining occupancy is historically followed by plateauing rates, indicating that a peak in hotel trading may nearly have been reached," concluded the report.
Branded hotels set to increase in UK >>