UK Hotel Growth 2024 Forecast 2025

UK hotel supply grew by 2.2% in 2024, with the addition of some 15,000 rooms either returning to supply or through new hotel openings and after consideration for hotels which ceased trading. Total UK hotel supply rose to over 705,000 rooms, returning to 2019 stock levels. Hotels being used for asylum accommodation has influenced hotel supply in recent years, with our research indicating that at its peak, during the summer of 2023, some 35,000 rooms were diverted away from normal hotel operations.

With both the Conservative and Labour governments scaling back on the use of hotels to house asylum seekers, we estimate some 20,000 hotel rooms remain under government contracts, a quarter of which are in London. Of the hotel stock that remains ‘out-of use’, some 9,000 of these rooms were from hotels which previously traded under a global brand. London dominates the hotel development landscape, accounting for 35% of the scheduled pipeline for new openings in 2025.

Through a combination of new hotel openings and hotels reopening following a refurbishment, based upon current development schedules, London is set to welcome a total of 5,200 new rooms, equating to a rise of 3.4% in supply. A further 1,800 rooms are speculated to open through hotel expansions, but not all are expected to open in 2025. London’s supply growth is forecast to grow by a compound annual average growth rate of 2.3% for the four-year period between 2022 and 2026. With regional UK hotel supply boosted by the return of exclusive use hotels, supply levels grew by 2% in 2024, with a net increase of some 10,800 rooms.

In 2025, similar growth is envisaged, but the pipeline will instead be dominated by new openings, with more than 9,000 new rooms forecast to open, excluding any existing hotel expansions. (Source Knight Frank)