As corporate travel demand rebounds in Europe, London firmly retains its title as the second-most expensive city for business trips, following New York. With a projected total daily cost of $600 in the fourth quarter of 2024, visiting the British capital remains a costly venture, even as economic uncertainty casts shadows over future travel plans.
Costs Breakdown: What to Expect in London
The average daily expenses for business travelers in London highlight the city’s steep prices. The average hotel rate stands at $294 per night, while daily taxi costs can reach approximately $150. Dining out is another significant expense, averaging $156 per day. Compared to the previous quarter, these costs have risen by 1.6%, indicating a persistent trend in high spending for those traveling for work.
Despite forecasts predicting an increase in hotel supply in 2025—more than any other major European city—the overall demand for both leisure and corporate travel continues to surge. This combination means that securing affordable accommodations or transportation options will remain a challenge for many travelers.
Strategies for Budget-Conscious Travelers
Given the high costs associated with traveling to London, there are ways to mitigate expenses. Utilizing a travel management company or a reputable hotel booking platform could help uncover more reasonable rates for accommodations. Additionally, London boasts an extensive rail network, allowing travelers to consider staying outside the city center where rates may be lower, yet still gain easy access to necessary business locations.
Travelers should also be aware of a recent requirement for electronic travel authorization (ETA) for entry into the U.K. This new regulation, implemented in 2023, mandates that visitors from numerous countries—including the United States and various European nations—complete an online pre-travel check before arriving.
The Current State of London’s Travel Market
In recent years, London’s travel sector has shown resilience marked by strong inbound demand, ongoing hotel development, and consistently high occupancy rates. The latest data from real estate analytics firm CoStar indicates that the U.K. has surpassed pre-pandemic levels of hotel occupancy, reaching a full 100% of 2019 figures through February 2025.
However, forecasts from VisitBritain reveal that while total inbound travelers to the U.K. are expected to rise by 5% year-over-year to hit a record 43.4 million, business travel—especially non-convention corporate travel—has not seen a similar recovery. This discrepancy raises questions about the sustainability of recent trends in travel and hospitality.
After a flat January, February saw a slight decline in Greater London’s hotel occupancy, dropping about one percentage point to 73%, alongside a 4% drop in the average daily rate to £179. Although a minor dip might typically go unnoticed, the current global economic climate, marked by increasing trade tensions and uncertainty, necessitates closer scrutiny of these indicators.
Future Development: More Rooms on the Way
Looking ahead, London’s hotel supply is set to expand significantly. In 2025 alone, over 5,600 new hotel rooms are expected to be introduced, the highest number in Europe. Istanbul follows with 3,900 new rooms planned, while Dublin anticipates 3,200.
Among the notable projects in the pipeline are Templeton Gardens in Kensington, featuring 156 rooms from lifestyle hotel brand Miiro; the chic Six Senses London, offering 109 rooms; and The Newman, an 81-room boutique hotel from Preferred Hotels & Resorts. These developments hint at continued investment in the hospitality sector despite fluctuating market conditions.
Longer-term projections remain promising for London’s hotel landscape. According to Lodging Econometrics, the city currently leads Europe with the largest hotel development pipeline, boasting 77 projects that will yield over 14,800 new rooms.
Conclusion
As London grapples with its status as Europe’s priciest destination for business travel amid evolving market dynamics, the landscape remains a mix of opportunity and challenge for travelers.
