The forecast by PwC says it expects occupancy rates in the capital to exceed 84 per cent this year, making it the top ranking city under this measure. However, London falls far behind Paris on the average daily rate charged, with a day at a London hotel expected to cost an average £131 compared to £186 in Paris.
The positive news for the industry is not just confined to the capital, however, with UK regions expected to see their highest ever occupancy levels and average daily rates.
Other European cities forecast to have a good year are Dublin and Madrid, echoing the recent revival for two of the worst-hit countries during the financial crisis, with revenue per room (RevPAR) expected to grow by eight per cent and five per cent respectively, putting the two cities at the top of the league for revenue growth.
London comes third for growth a just under five per cent.
Sam Ward, UK hotels leader at PwC, said: “The future for hotel deals across Europe is bright, as equity rich investors look to invest in the sector and benefit from stronger returns as trading conditions are set to improve. “