London hotels achieved double-digit revenue per available room (revpar) growth last year, according to a Deloitte analysis of daily figures from STR Global.
Daily results up to and including 31 December showed revpar increases of 11.9% to £112. Performance in the regions also ended the year on a high note, with revpar up 3.9% to £46.
Marvin Rust, hospitality managing partner at Deloitte, said: "Hotels in the capital performed particularly well in the final two quarters of the year. Average room rates have been the key driver of growth, with £12 being added compared with 2009 and now stand at £136."
The outlook for 2011, however, is uncertain, especially for the capital, Rust warned.
"GDP is expected to rise by just 1.3% this year, VAT increased to 20% on 4 January and retailers are expecting more challenging operating conditions," he said.
"On the positive side, the royal wedding and a weaker pound against the dollar will no doubt bring more US travellers to London."
Deloitte estimates that total transaction activity in London hotels in 2010 was in excess of £1bn.
Nick van Marken, global head of advisory - tourism, hospitality & leisure, said: "Against a backdrop of significant restructuring across the UK hotel industry, London has seen a spike in investment activity in 2010. This really underpins the city's inherent attraction to global investors, and demonstrates that even in difficult times, prime hotel property remains in demand."
By Daniel Thomas
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