Excessive luxury is forcing the old guard to level up. The Dorchester is currently undergoing refurbishment and rooms start from £1,200.
At The Lanesborough, next door to the new Peninsula and open since 1991, revenue soared 12% to a record high in 2023.
“We’re not seeing a huge increase in guest numbers, but people are spending a lot more,” says managing director Stuart Geddes. “They are staying in more upscale suites and staying longer.
“Traveling and eating out were the two biggest things that were canceled during the pandemic. So now people want to travel and spend more money.”
A butler is assigned to each room at The Lanesborough and can often be seen walking guests’ dogs around Hyde Park wearing tails.
This glamor stands in stark contrast to the wider British economy, which is suffering a cost-of-living crisis and is likely to slip into recession in the second half of this year.
“London just operates in a different stratosphere to the rest of the UK,” says Roy. “Even if you extrapolate from London to places like Birmingham or Leeds, there is no comparison.”
The city’s economy has long been cut off from the rest of the country. According to the latest official figures, London’s average GDP per capita is 77% higher than the UK average.
Dame Diane Coyle, a professor of public policy at the University of Cambridge, said a booming property market would increase wealth, while the concentration of high-value sectors such as financial services in London meant increased productivity. London is the most productive area in the UK, with output per hour of work a third higher than in the rest of the UK.