London could see a 27% increase in luxury hotel rooms by the Olympics in 2012, with around 18 hotels under construction, according to PricewaterhouseCoopers.
Many of the new properties are demonstrating a trend towards fewer rooms and more suites. For example, the newly reopened Four Seasons Park
Lane has 45 suites out of a total of 192 bedrooms.
Other planned luxury hotels, which include a Shangri-La, Corinthia and Bulgari, will increase competition in the London market.
However, some in the sector believe they will have a “halo effect” on the rest of the city.
“Some hotel operators admit a 27% capacity increase will impact trading,” said Liz Hall, head of hotel research at PricewaterhouseCoopers.
“However, others believe that the reopening of iconic hotels such as the Savoy and the Four Seasons, along with new names on the scene, will have a positive halo effect, ensuring London continues to compete with the other major cities in the world with top-end hotels.
“Demand should strengthen as the Olympics near, but hotels will have to be proactive with their marketing.”