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UK: Strong regional demand, luxury hotel outperformance, and a growing development pipeline were among the key trends highlighted at the Buell Hospitality Business Exchange Programme.
The UK hotel market continues to demonstrate resilience despite modest demand growth, with regional destinations outperforming London and luxury properties leading the way, according to insights shared by Aoife Roche, VP sales EMEA at STR, during the Buell Hospitality Business Exchange Programme.
Roche revealed that European occupancy reached 72 per cent in 2026, a five-year high, while average daily rate (ADR) increased by four per cent.
This performance came despite fluctuations in international demand, particularly from the US, a key source market for European hotels. American arrivals declined by two to three per cent during June, July and August, marking the first downturn in 24 months. However, a recovery in September helped drive a 10 per cent increase in European RevPAR.
In the UK, demand growth has been more subdued at 0.9 per cent, although occupancy remains strong at an average of 78 per cent. Regional destinations have been particular bright spots, with York achieving 86 per cent occupancy and Edinburgh 85 per cent.
Luxury hotels continue to outperform the wider market, with European RevPAR growth of approximately eight-to-nine per cent, while the upscale and upper-upscale segments are also gaining momentum.
New supply presents both opportunities and challenges. Approximately 26,000 hotel rooms are currently under construction across the UK, equivalent to 3.5 per cent of existing inventory, with London, Edinburgh and Manchester among the primary development hotspots.
Looking ahead, STR anticipates positive growth across most UK markets in 2027, with improving international demand and major events, including UEFA Euro 2028, expected to provide further opportunities for the sector.
Join the conversation in Bath and Manchester
These insights form part of the wider discussions taking place throughout the Buell Hospitality Business Exchange Programme, a series of four regional events bringing hospitality professionals together to explore market trends, share expertise, and discuss the opportunities and challenges shaping the industry.
With two events remaining, hospitality owners, operators and industry stakeholders can register for no-cost tickets in Bath on 18 November and Manchester on 24 November.
