The UK hotel industry saw double-digit growth in revenue per available room (revpar) in London and a healthy increase across the regions in 2006, according to annual research.
The HotelBenchmark Survey by Deloitte reveals that during 2006 revpar in London increased by 16.8% to £96, its highest level since 2000.
Although the performance of the regional UK market was moderate at 4.4% - this still marked the third year of consecutive growth.
Marvin Rust, hospitality managing partner at Deloitte, said: "2006 has been a great year for the London hotel market after the challenges of 2005, buoyed by the return of Farnborough Airshow and the Motor Show.
"The capital appears to have learnt valuable lessons from the past and is also reaping the rewards of more sophisticated revenue management.
Rust said looking to next year, when the capital will host the Tour de France Grand Depart, he expected London's good fortunes to continue driven by improvements in average room rates.
Outside of London, Aberdeen was the fastest growing hotel market, enjoying impressive growth of 15.1% thanks to strong weekday business demand from the North Sea oil industry.
Belfast followed Aberdeen with growth of 13.9%. However, the revpar of both cities is still substantially lower than Edinburgh which, at £67, commands the highest rates outside London.
Nottingham was the poorest performing city recording 5.2% drop in revpar reflecting the recent significant supply increases in the city.
Hotel performance in Yorkshire is also declining. Sheffield, Leeds and York saw revpar fall by 1.7%, 0.4% and 0.6% respectively.
By Daniel Thomas