The number of empty hotel beds in London increased by more than one-third in October compared with a year earlier.
Average rates fell by 7.7% to below £150, according to preliminary figures from global hotel data firm STR, analysed by The Independent.
The four-star Copthorne Millennium Hotel in Kensington is selling double rooms for next Sunday night for £87 – only £5 more than a basic room with twin bunk beds room at the nearby Safestay hostel in Holland Park.
The London-wide occupancy rate in October was 85%, down from 89% the year before.
It is the lowest figure for the month since the start of the financial crisis in 2008.
The falls in October are the steepest for the month since 2001.
STR analysts reported that demand fell “across both weekday and weekend business”.
Revenue per available room fell by 11.4% last month compared with the previous year.
Outside London, occupancy fell slightly – down 1.4% cent to 79.7% – but was outweighed by a 1.9% rise in average the rate to £72.16.