Bucks and Oxon hotels reach London lux rates

Hotel rooms in Buckinghamshire and Oxfordshire have reached the same room rates as luxury London hotels, according to data from CoStar.

The 12-month average daily rate in February 2024 for hotels in the two counties was over £450, slightly ahead of London.

However, the total luxury room inventory in the region is much smaller, with ultra-luxury assets such as the Le Manoir aux Quat’Saisons and A Belmond Hotel, likely driving average rates upwards in the area.

Meanwhile London includes a much wider sample with greater variability in pricing among properties.

Despite having the highest ADR among the markets analysed, luxury hotels in the Buckinghamshire and Oxfordshire market have seen the biggest RevPAR drop, largely driven by losses in occupancy, while rate has remained stable.

Edinburgh has been a clear winner in driving 12-month RevPAR as occupancy and rates continue to improve within the luxury class.

With demand stabilising and, in most cases, rates flatlining, hoteliers in luxury properties will be required to operate in an efficient manner to drive profitability.

Labour costs are expected to increase with rises to the National Living Wage in April, while food and energy expenses continue to pressure operators, despite inflation’s downward trajectory.

However, as global wealth continues to grow and outbound travel from recovering regions, such as Asia, makes its way back into the hospitality sector, there is an opportunity for hotels in the sector to capture their demand share and evolve.

Affluent travellers tend to be less price-sensitive and more likely to travel than the rest of the population, which should support the sector, especially in destinations like London and Edinburgh.