Over the next three years 43 budget properties are expected to open in the capital, including eight Travelodge hotels and three Premier Inn sites in 2016.
The new developments will add 17,769 rooms across the capital, up from the current figure of 138,769.
Tracy Halliwell MBE, director of business tourism and major events at London & Partners, credited the capital’s record visitor numbers as encouraging hotel investment.
“With the rising number of business and leisure visitors to London and strong occupancy levels across the city, it is great to see that a range of hotel companies are investing in new properties, catering for the demand for both low-cost and high-end hotels,” she said.
“With properties right next to many tourist attractions, these investments will help to attract more visitors to London as well as provide new facilities for both local and international businesses to host meetings and conferences across the city.”
A Deloitte survey of top hotel investors named London as the most attractive investment destination in 2016, despite over half of those questioned considering it ‘overpriced’.
According to PwC, London occupancies have averaged 80 per cent or above since 2006.
The company predicts that 2015 will record a record high of 84 per cent - driven by the Rugby World Cup - rising to 85 per cent next year.