Occupancy at London’s hotels remains below pre-pandemic levels, according to data from STR.

The gloomy disclosure comes as GlobalData confirmed a cliff-edge drop in the volume of hotel sector dealmaking, and Knight Frank pointed to an achingly slow investment scene.

STR said hotel room occupancy in January 2023 was 65.1%, down on January 2020’s 71.1%, usually regarded as the last normal month before the pandemic.

Revenue per available room, a measure that takes into account occupancy levels, was up by 4.3% over the same three-year period.

GlobalData reported a similarly unfestive start to the year with a total of just 38 mergers, acquisitions, venture financing and private equity deals in the hotel sector globally in January 2023. This represents a decline of 42.4% compared to December 2022.

“Dealmaking sentiment in the global travel and tourism sector appears to have been heavily impacted by current geopolitical tensions and recession fears. Deal volume in several leading economies experienced considerable slowdown, which contributed to the overall decline,” GlobalData lead analyst Aurojyoti Bose said.

Knight Frank research showed that 2022 recorded UK hotel transactions of £3B, 30% down on the five-year average. Transactions tanked in the second half, accounting for just 32% of the year’s total. Knight Frank predicted around £500M deals likely to complete in Q1, a pace of activity that will have to accelerate rapidly if last year’s total is to be bettered.