London overtakes Amsterdam as top European city for hotel investors

London has overtaken Amsterdam as the most attractive European city for hotel investment, according to a study by Deloitte.

Hospitality industry leaders, developers and investors ranked the UK capital as the top destination, with Lisbon in second place.

Amsterdam fell to third position, the first time it has dropped out of the top spot since 2017.

Nearly three-quarters of respondents (73%) said they were optimistic about the long-term future of the UK hotel market, up from 66% last year.

London has seen a boom in luxury hotel openings this year, including 1 Hotel Mayfair, Raffles London at the OWO and the Peninsula London.

More than half (54%) expect to see London’s revenue per available room (RevPAR) grow between 4% and 7% this year, while 72% anticipate RevPAR to rise between 1% and 5% in the UK regions.

Edinburgh was ranked as the top regional UK city for investment for a third year, ahead of Oxford and Manchester.

Andreas Scriven, head of hospitality and leisure at Deloitte UK, said: “It is reassuring to see London climb back up the rankings, and it is perhaps not surprising to see new hotels opening given the UK’s capital’s centre for tourism and business, as well has being a gateway city for international travel.”

Hospitality leaders cited rising costs (89%), higher interest rates (87%), a shortage of skilled labour (85%) and increased staff costs (81%) as key concerns that could hinder growth in the year ahead.

Scriven added: “For London to continue to remain attractive to hotel investors, the industry will need to address concerns around the ability to drive pricing in light of inflationary pressures.”