London hotel ADR grew in 2025. London hotel GOPPAR fell.
Let that sink in.
Rising room rates are not translating into real profit growth. Cost inflation in labour, energy, and food is outpacing revenue growth. In London, GOPPAR fell 0.5% to £111.60 despite ADR increases. Regional UK GOPPAR was flat.
The headline revenue numbers look healthy. The bottom line tells a different story.
The market is bifurcating
Not everyone is losing.
Regional upscale properties converted revenue growth into a 3.4% annual increase in GOPPAR. Golf & Spa hotels saw TRevPAR grow 4.2% and GOPPAR up 2.8%, driven by strong ancillary revenues.
London luxury hotels? GOPPAR down 4.0%.
Same market conditions. Radically different outcomes.
What separates winners from losers?
Not location. Not luck. Strategy.
The winners aren't just selling rooms. They're selling experiences. They're monetising wellness, leisure facilities, F&B, parking. Ancillary revenue is a strategic profit centre, not an afterthought.
When a guest books a room, that's the beginning of the revenue opportunity, not the end. Golf & Spa hotels understand this instinctively. A room booking is a platform for spa treatments, green fees, dining, retail, experiences. Each touchpoint is a margin opportunity.
The London luxury hotels struggling? Many are still running the old playbook. Maximise ADR. Maintain occupancy. Hope the numbers work out. In an inflationary environment, they don't.
Out-execute, not out-price
When you can't out-price inflation, you have to out-execute it.
Operational efficiency. Labour productivity. Energy management. Procurement optimisation. Every department examined for margin leaks. The 2019 cost base is not coming back.
Ancillary revenue as strategy. What percentage of your guests use your spa? Dine in your restaurant? If you don't know these numbers, you don't know where your opportunity lies.
Experience-led positioning. The market will pay for experiences. It won't pay a premium for a commodity room in an expensive building. What makes your property worth the price?
Different KPIs. If your commercial team is bonused on room revenue, they'll optimise for room revenue. Change the incentives, change the behaviour. GOPPAR and TRevPAR matter more than occupancy and ADR.
The uncomfortable truth
Revenue growth without profit growth is just expensive market share. Your team is busier. Your property is fuller. Your bank account isn't growing.
We need to get back to fundamentals. Protect margins. Control costs. Build businesses that generate real cash flow. Not vanity metrics. Actual profit.
Are we listening? Or still celebrating ADR growth while GOPPAR quietly erodes?
Elliott Wakefield is a commercial consultant specialising in independent boutique hotels.
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