Staggering truth about London hotel prices

The city’s hotel scene is booming, and that’s not good news for travellers on a budget.

Booking a hotel in London is becoming like playing a game of Monopoly. You start off flush with cash, skipping past the famous locations. Will you stay on the Strand? Or pick Piccadilly? Then you land on a hotel on Mayfair and realise you’ll either have to take out a mortgage to stay, or go bankrupt.

I’m only slightly joking. London’s hotel scene has undergone a metamorphosis in the past five years and prices have skyrocketed. As a result, unless you are Mr Monopoly Racing Car or Ms Top Hat, it’s looking more and more likely you’ll be resting your head somewhere like the Old Kent Road.

The reason behind the price-hike is manyfold – a combination of lockdown, the cost-of-living crisis and, finally, the arrival of the billion-pound hotels.

According to data from Lighthouse, London hotel rates rose 26.53 per cent in the last five years. Shockingly, Edinburgh experienced up to 82 per cent increases. Occupancy rates are high, too. Last year, the London luxury-hotel market saw an increase in occupancy to 69 per cent from 62 per cent the previous year, according to the RSM Hotels Tracker, exceeding pre-pandemic levels for the first time. That means there’s no shortage of visitors, therefore no chance of lower room rates returning.

Pre-lockdown, a top-end five-star hotel room might have cost you around £500 (around $975) a night. Now those same rooms are £750 ($1460) to £1000 ($1947) . Added to that, the dawn of the new über-deluxe hotels, such as The Peninsula London – the first billion-pound hotel development in the city – Raffles London at the OWO and the new all-suite The Emory, has made the £1000-a-night room the norm.

Uber-luxe hotels, including Raffles London at the OWO, have made the £1000-a-night room the norm. Picture: Supplied.

For example, an Expedia search for a hotel room, on August 14 – the middle of the British summer holidays – returns £1800 for The Emory and around £1000 for The Peninsula, The Lanesborough and Raffles. The next level down includes the Ham Yard Hotel and The Beaumont – both beautiful hotels with exceptional service – at around £650 for the same date, followed by the Sheraton Park Lane and Marriott Hotel County Hall for around £450. Anyone looking for a family room can expect to pay more than that.

So, are these £1000-a-night hotels worth it? Well, relatively, yes. I stayed at The Peninsula recently and it was absolutely faultless and measurably twice as good as mid-range hotels. Raffles was also wonderful. The problem is, if visitors – especially Australians – hope to enjoy the city over a week, you better be a billionaire if you want to stay in the West End. It’s clearly not a problem for The Peninsula, because when I visited, every room was full.

The knock-on effect of the price rises and the dawn of the super-luxe hotels has been an adjustment of prices of mid-range hotels, which is not to the benefit of the average traveller. To put it in perspective, I stayed at the wonderful four-star St Ermin’s Hotel in Westminster, in 2018, when doubles started at £160. The same hotel is now around £400.

There’s a fabulous art’otel at Battersea Power Station, which you can access by tube or ferry. Picture: Supplied.

At a time when money isn’t going anywhere near as far as it used to for most of us, the expectation is you want to feel you’re getting a treat, not wasting your cash.

Still, there is good news for anyone planning a visit to London. First, the city has enjoyed the most incredible hotel boom over the past decade, meaning there has never been so much choice for the traveller. Quite honestly, if you have the means to really treat yourself, then I’d advise you go all-in at the new top-end, not halfway. A stay at The Peninsula, Raffles, The Emory or the new boutique Mandarin Oriental Mayfair will deliver next-level luxury and an unforgettable experience of London at its best.

There are also plenty of ways of getting better deals. Try to be flexible with dates, as the high occupancy rates mean higher room-rates from one night to the next. And look to stay further out – London has excellent transport links and there are many hotel hubs growing up in areas outside of the West End, with easy access. Southwark/Bankside, for example, is full of good hotels around Blackfriars Road. On the Jubilee Line, it’s also right on Southbank, so you can walk into the West End. Similarly, if you stay in the City, Kensington, Shoreditch, or around King’s Cross, you can enjoy a five-star hotel for considerably less than in Covent Garden. There’s a fabulous art’otel at Battersea Power Station, which you can access by tube or ferry and a funky new sister hotel in Hoxton – both areas are full of shops and restaurants. Finally, book as far ahead as you can, which will ensure you get both the best price and give you time to start saving.

Originally published as Staggering truth about London hotel prices