London Hotel Field Trip: From Spa to Sparse

Research evidence excerpt

London Hotel Field Trip: From Spa to Sparse

Idea

July 15, 2026 04:01 AM GMT

Morgan Stanley & Co. International plc+MHotels | Europe Jamie Rollo

Equity Analyst

London Hotel Field Trip: From Jamie.Rollo@morganstanley.comJames S Harden +44 20 7425-3281

Research Associate

James.Harden@morganstanley.com +44 20 7677-0986

Spa to Sparse Ed Young

Ed.Young@morganstanley.com +44 20 7677-1761

We toured London hotels spanning the luxury, compact value

Leisure and Hotels

and broader value segments: IHG's Six Senses, Whitbread's hub Europe

by Premier Inn, and Travelodge. The visits provided property- Industry View Attractive

level insight into the brands’ positioning, customer propositions,

operating models and expansion plans, alongside management

commentary on market conditions. Luxury continues to

outperform budget hotels.

We recently hosted our annual London hotel field trip: We looked around hotels

with investors and senior management from three of the largest UK operators: IHG

(Six Senses), Whitbread (Premier Inn) and Travelodge. See our detailed company

takeaways here and video with executive interviews here. For context, the UK is

90% of revenue at Whitbread and 7% at IHG.

UK RevPAR has picked up but remains dull: UK RevPAR is +1.7% YTD, a slight

improvement on last year's +0.9%, but still below inflation and below Europe/US

YTD +2.2%/+4.7%. Within this, Midscale & Economy RevPAR is +0.2% YTD, with

London -0.7% and the Regions +2.4%. The companies cited a variety of reasons for

the weakness:

• Weak Middle East and Asian inbound following the Iran conflict

• A weaker H1 events calendar this year

• Softer corporate demand and business confidence

• More outbound leisure travel by UK citizens

• Pockets of new London supply both at the luxury and economy end

Any glimmers of hope?