The number of hotel rooms in the capital is set to grow by 12% over the next three years according to new data from AM:PM and London & Partners, which works to promote London as a destination.
The rise is being driven by an uplift in budget and five-star hotel accommodation, with new properties and extensions adding 17,769 more rooms across the capital over the three-year period, up from the current figure of 138,769.
Around 43 budget properties are expected to open by the end of 2018, with low-cost accommodation in the city predicted to increase by 29%.
Meanwhile, 19 five-star properties will also open, increasing the hotel in this category by 22%.
London has been enjoying record occupancy over the past several years, averaging 80% or above since 2006, according to PwC. The firm predicts a decade high of 84% occupancy this year, thanks in part to the Rugby World Cup. Occupancy should increase to 85% in 2016.
Tracy Halliwell, director of business tourism and major events at London & Partners, said: "With the rising number of business and leisure visitors to London and strong occupancy levels across the city, it is great to see that a range of hotel companies are investing in new properties, catering for the demand for both low-cost and high-end hotels.
"With properties right next to many tourist attractions, these investments will help to attract more visitors to London as well as provide new facilities for both local and international businesses to host meetings and conferences across the city."
Alan Gordon, director of AM:PM, said: "London has absorbed significant new hotel supply in recent years and continues to attract serious attention from UK and international hotel groups looking to enter or extend their presence. Alongside wider infrastructure and real estate investment in the capital, the footprint of the hotel market in London continues to expand and this has opened up new opportunities in many locations. Aldgate, Shoreditch, Vauxhall and Whitechapel are just a few areas that are witnessing exciting change that includes new hotels, many of which are from brands making their UK debut."
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