Investing in luxury hotels has become an increasingly attractive option for investors looking to diversify their portfolios and capitalize on the growing demand for high-end accommodations. This blog explores the current trends in luxury hotel investments in central London and highlights key locations around the world that present lucrative opportunities.
Luxury Hotel Investment in Central London
Profitability and Growth
London’s luxury hotel sector has shown remarkable resilience and growth, especially post-pandemic. The sector delivered its highest level of profitability since the pandemic began, driven by an uplift in overseas visitors and a strong recovery trajectory. This profitability has attracted significant investor interest, with transactions totalling £825 million in the first half of 2023, dominated by private investors.
New Developments and Openings
The luxury hotel market in London is set to expand significantly, with around 6,500 new rooms expected to open by the end of 2024. Notable new openings include:
– **Aptote London Hoxton**: Featuring 357 guest bedrooms, event spaces, bars, restaurants, a swimming pool, spa, and a skyline gym.
– **Mandarin Oriental Mayfair**: Designed by renowned architects and featuring the first UK restaurant by Michelin-starred chef Akira Back.
– **The Emory, Belgravia**: A project by the Maybourne Hotel Group, known for its luxurious design and high-end amenities.
– **Six Senses London**: Located in the former Whiteleys department store, offering 110 curated guest rooms and suites.

Market Dynamics
London remains a top destination for hotel investment, outperforming other European cities like Lisbon, Amsterdam, and Paris. The luxury segment, in particular, has shown strong performance with high revenue per available room (RevPAR) and total revenue per available room (TRevPAR). The recent business rate revaluation has also benefited large London hotels, reducing their rateable values by an average of 28%.
Key Global Locations for Luxury Hotel Investment
North America
– Four Seasons Hotel New York: Known for its exceptional service and prime location, making it a highly attractive investment.
– The Plaza Hotel: An iconic property in New York City, offering a blend of historical charm and modern luxury.
Asia
– The Ritz-Carlton, Hong Kong: Offers stunning views and world-class amenities, making it a prime investment opportunity.
– Mandarin Oriental, Bangkok: A historic hotel known for its luxurious accommodations and exceptional service.
Middle East
– Burj Al Arab, Dubai: One of the most iconic hotels in the world, offering unparalleled luxury and unique investment potential.
Europe
– Shangri-La Hotel, Paris: Combines historical architecture with modern luxury, attracting high-value travellers.
– The Dorchester, London: A prestigious property known for its opulence and prime location.
Australia
– Park Hyatt Sydney: Offers stunning views of the Sydney Opera House and Harbour Bridge, making it a highly desirable investment.
Emerging Trends in Luxury Hotel Investments
Boutique Hotels
Boutique hotels are gaining popularity for their unique designs, intimate settings, and personalized services. These properties often attract high-value travellers willing to pay a premium for one-of-a-kind experiences. In London, boutique hotels like The Beaumont and The Connaught offer distinctive styles and high levels of service.
Technology and Sustainability
Integrating digital solutions and sustainability initiatives are becoming crucial for luxury hotels. Contactless experiences, mobile app functionalities, and eco-conscious practices resonate with modern travellers and can enhance brand reputation.
Bleisure Travel
The rise of “bleisure” travel, where business and leisure trips are combined, is creating demand for hotels that offer both work and relaxation amenities. This trend is particularly relevant in business hubs like London.
Conclusion
Investing in luxury hotels in central London and other key global locations offers significant growth potential and stable returns. The sector’s resilience, coupled with the increasing demand for high-end accommodations, makes it an attractive option for investors. By staying attuned to emerging trends and focusing on prime locations, investors can capitalize on the lucrative opportunities in the luxury hotel market.
