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One in every two new London hotels are budget, report reveals

London Hotel Development Monitor shows low-cost hotels now make up 20 per cent of city's total supply

Pictured: Nobu Hotel Shoreditch is one budget hotel due to open later this year

London's budget hotel sector has grown "significantly" since the 2012 Olympics, with the sector comprising more than half of the 18,000 hotel rooms that have opened in that time.

In a new report from property consultant JLL and London & Partners, it has been revealed low cost hotels now make up 20 per cent of the total supply across the city. A further 33 per cent of the 7,000 rooms due for completion this year will be in the same sector.

The report, London Hotel Development Monitor, also showed new infrastructure improvements and a booming digital economy had created a 'knowledge corridor' from Bloomsbury to Paddington, with hotel activity increasing in those areas.

It also reveals London dominates investment across Europe's hotel sector, with the capital attracting 36 per cent of total investment.

Graham Craggs, JLL’s hotels and hospitality group MD, said: “2015 was an exceptionally strong year in terms of hotel transactions in London. Activity will remain high in 2016 and we expect the trend will shift towards single asset transactions. Underlying market fundamentals continue to be positive and the outlook for hotel performance in London is good.”

Key openings include a new Premier Inn on Tottenham Court Road and US-based hotel operator Standard opening its first hotel in 2018 in the former Camden Hall. In 2016, 800 rooms are expected to be added to Shoreditch alone, with new hotels including Z Hotels and Nobu Hotel Shoreditch.

Gordon Innes, chief executive of London & Partners, added: “The hotel industry is a vital part of London’s booming tourism economy, which is now worth £36 billion and supports hundreds of thousands of jobs, many of which are widely accessible. As more and more visitors come and explore our great city, it’s encouraging to see the hotel sector growing and bringing exciting new developments to visitors.”

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