UK Hotels See Slower Growth in First Half of 2025 Amid Rate Cuts and Lower Demand
Hotels across the UK faced a challenging first half of 2025, as operators reduced room rates in an effort to maintain occupancy following two years of strong performance.
According to CoStar’s year-to-date data through June, average occupancy across the country dipped slightly to 74.6%, down from 75.2% during the same period in 2024. The average daily rate (ADR) also declined by 0.6% year-over-year to £114.53.
London was hit hardest by the slowdown. The capital city saw an influx of new hotel supply, more price-sensitive consumers, and a lighter calendar of major events compared to the previous year—all of which contributed to weaker performance.
Industry data from CoStar and Knight Frank, along with insights from JLL, paint a picture of a market under pressure. Financial results from major hotel operators further underscore the downturn.
Operators Report Declining Revenues
Several leading hotel chains reported a drop in revenue per available room (RevPAR) for the first half of 2025:
– Travelodge posted a 5.6% decline in UK RevPAR, with Greater London seeing a sharper drop of approximately 11%.
– Premier Inn reported a 2.4% decrease in UK RevPAR during its fiscal first quarter, including a 5.5% decline in London.
– IHG (InterContinental Hotels Group) also noted weaker performance, though detailed figures were not disclosed.
The data suggests that after a period of post-pandemic recovery and growth, the UK hotel market is entering a more competitive and price-sensitive phase, particularly in urban centers like London.
Source: skift.com