Hotels in the UK are seeing profits exceed pre-pandemic levels after experiencing a strong trading performance in 2023, according to new data from Knight Frank.

The latest research showed that the UK hotel sector has continued to improve significantly this year, with London’s 12-month occupancy increasing by 16 percentage points to reach 77%, ahead of the UK’s regional occupancy performance for the first time since the post pandemic recovery began and in line with historical trends.

Meanwhile, the high inflationary environment has supported pricing, with London’s ADR rising by 8% in the past 12 months and up 22% on its 2019 performance.

The ongoing recovery of overseas visitors has been the key driver behind the significantly boosted occupancy levels, with trading further supported by strong growth in corporate and meetings and events business, as well as continued robust leisure demand.

The regional market has remained buoyant throughout 2023, with Knight Frank forecasting full year occupancy to reach above 74% and ADR envisaged to grow to £103, the first time in history to achieve above £100.

Full year 2023 occupancy will continue to lag 2019 levels by just 2.6 percentage points, but there will continue to be strong ADR growth, up by 26% versus 2019 – buoyed by conference business returning and continuing strong demand for short break leisure trips.