That’s according to PwC’s latest Hotels Forecast, which warns that the boom in new openings in the capital will further outstrip demand.
London’s hotel sector is expected to grow by a further five per cent in 2017, but occupancy is set to hit the lowest level since 2008, dropping 0.8 per cent to 80 per cent.
However, the regional outlook is far brighter, with occupancy projected to rise 0.5 per cent to 77 per cent in 2017 – a record high for the sector.
RevPar in London hotels is expected to fall 0.5 per cent in 2017 to £114, but the regions will see a 2.3 per cent rise to £54 – 20 per cent higher than pre-recession peaks.
PwC said it was maintaining a ‘cautious’ outlook on the future of the sector following the Brexit vote.
“While the full impact of the UK vote to leave the EU will not be known for some time, economic growth is expected to slow," the report said.
“A weak pound should provide a boost to inbound leisure travel, but security concerns, tight corporate travel budgets, above average supply growth (especially in London) and consumer and corporate uncertainty could create an unfavorable backdrop.”
Dr Andrew Sentence, senior economic adviser at PwC, said: “Hospitality and tourism is a key sector for growth, employment and overseas earnings in the UK. How the industry responds to current challenges and additional economic uncertainty will be a key barometer of economic prospects in the post-Brexit British economy.”