In recent months we have worked on a number of projects in central London’s neighbouring South Bank and Bankside districts, south of the River Thames. It has been interesting to see how decades of investment in residential, commercial, cultural and public realm development has transformed the area into central London’s busiest hotel district, regularly recording occupancy higher than other areas.
It’s worth considering exactly what is driving this very high demand, and whether occupancy performance is sustainable in the face of continuing very strong developer and operator demand for new hotels.
The South Bank (generally considered to be the area between Westminster Bridge in the west to the Oxo Tower in the east) has received significant investment over many decades, from the development of County Hall in 1917, to the Festival of Britain in 1951 resulting in the Southbank Centre and cultural venues, and the emergence of major visitor attractions in the early 21st century.
Bankside (Oxo Tower to Southwark Bridge in the east) on the other hand was relatively late to the game, with Shakespeare’s Globe Theatre and Tate Modern emerging from the 1990s. In the last 20 years, it has emerged as a major centre of commerce with significant office developments and a large number of new hotels driving business and leisure tourism.
Performance
Whilst it is not surprising that hotel demand is very strong due to the substantial commercial, event and leisure drivers and excellent connectivity, it is the growth, consistency and resilience of this sub-market over the last 20 years that stand out.
We have looked at the supply and performance of hotels from Westminster Bridge to London Bridge, and as far south as Westminster Bridge / Borough Roads over the last 20 years, as reported by CoStar.
2025 occupancy was about 87%, well above the London average of 81% and continuing to increase in July 2026 year to date. Surprisingly, you have to go back to 2005 (with the exception of the Covid affected years 2020 to 2022) to find annual occupancy below 85%.
Perhaps that is not remarkable in itself, but it most certainly is when considered in the context of significant supply growth; there has been a more than five-fold increase in room supply in the last 20 years, with 23 new hotels (more than 5,000 new rooms) opening.
Maintaining occupancy consistently above 85% means that demand growth over the last 20 years has been more than 400% compared with the overall London average of about 75%.
Outlook
Key questions that arise when working on projects in the South Bank / Bankside areas are around the prospects for future demand growth and capacity for further significant supply increases.
These questions are important because the pipeline of new hotels is substantial, albeit only one is currently under construction, and operator and developer appetite remains very strong.
It is important then to consider the ongoing significant investment in demand drivers that continues to shape the area and join the dots between previous developments.
Timber Square for example is the recently completed development of two large grade A office buildings in Bankside, with one of the buildings reported to be let to BP for their global headquarters.
Further significant regeneration is underway at Bankside Yards close to Blackfriars Station, and master planning is underway at Waterloo Station and surrounding areas; both schemes will deliver further office and hotel developments.
Conclusions
The sheer volume of new hotel supply and growth in demand more than keeping pace over the last 20 years is remarkable.
With considerable further investment in demand drivers recently completed, underway or planned, we believe there is significant capacity for more hotels in the area in the medium to long term.
Ultimately, due to the volume and variety of demand drivers within walking distance, including in Westminster and the City, along with superb rail connectivity, there is no foreseeable slowdown in demand growth in this part of London, with new, contemporary hotel developments providing attractive destinations for visitors of all types.
Get in touch for further details or to discuss your project.
Andrew Renouf – 07584 186520
andrew@arhospitalityconsulting.co.uk
Photo by Çağlar Canbay on Unsplash