The real cost of staying in different London travel zones
5 January 2017
TfL is improving capacity/accessibility on the Underground, but how does hotel pricing differ across the main lines?
Much of London’s booming business expansion would not have been possible without the mobility provided by the London Underground. With the expansion of the network making each travel zone increasingly easy to reach, the capital has also seen a hive of investment in the hospitality sector. At the last count, the city had over 140,000 hotel bedrooms.
Travel zone hotel hotspots
The total cost of a trip is an important consideration for most travel managers and procurement teams, so we wanted to establish the difference between average room rates for Zone 1 versus other districts, and pinpoint where the best savings are to be had. Historically, there has always been a view that hotels in the business-focused City of London are more expensive than hotels in Kensington, for example. But how true is this?
Think outside Zone 1
Not surprisingly, that the heaviest concentration of hotel booking volumes was in Zone 1 – despite average room rates being up to 14% cheaper overall in Zone 2.
The savings to be had in different parts of Zone 2 vary considerably, however. Travellers staying in Zone 2 near the Piccadilly Line were potentially saving up to 36% on hotel rates, whereas savings in Zone 2 on the Circle Line were significantly lower, at just 5% less than Zone 1 in some cases.
As you’d expect, the further you travel from the heart of the capital, the lower rates go. Average room rates in Zone 3 were 19% cheaper than Zone 2, rates in Zone 4 were 14% cheaper than Zone 3, and so on. Unsurprisingly, properties in Zone 6 were more than 140% cheaper than staying in Zone 1.
Looking at each line in isolation showed some interesting results. Properties in close proximity to the Bakerloo, Jubilee and Waterloo & City lines currently command the highest average room rates, while accommodation on the Central Line, DLR (Docklands Light Railway) and Piccadilly Line were the cheapest overall.
Average room rates in Zone 1
- Bakerloo £160.48
- Central £144.22
- Circle £152.13
- District £154.16
- Hammersmith & City £174.32
- Jubilee £165.15
- Metropolitan £148.28
- Northern £151.52
- Picadilly £140.53
- Victoria £156.33
- Waterloo & City £169.84
- DLR £133.28
- London Overground £158.38
NB: Prices include VAT, breakfast and commission
So where are the prime locations on each line? Our analysis showed that overall the biggest concentrations of room nights are booked at properties close to the Circle & District, Hammersmith & City, Central and Piccadilly lines.
As you might expect, the most expensive hubs for hotel pricing on the Circle & District Line were St James Park, a stone’s throw from Buckingham Palace and the Houses of Parliament, and Tube stops in the City of London, such as Farringdon, Moorgate, Embankment and Mansion House.
Staying near the station: cheaper or not?
Properties that are close to the main railway hubs linking London to the north and south of the country, such as Euston, Kings Cross and Victoria, were more affordable by comparison. Average room rates in properties near these stations can be up to 50% cheaper than those in the City.
Clearly many organisations are already capitalising on this, with Euston Square being the most heavily booked tube stop on the Circle Line. For travellers prepared to commute a few extra stops, the cheapest pricing on the Circle Line can be found in Bayswater, Notting Hill Gate and High Street Kensington, with average room rates for a mainstream property in these areas ranging from £120 to £130.
There are even greater discounts to be found for those prepared to stay on the outer stretches of the District Line, where prices range from £65 to £100 per night.
The trend was similar on the Hammersmith & City Line, with properties in the City up to 39% more expensive than those at the mainline transport hubs, and up to 63% more expensive than properties in the outlying suburbs in Zones 3 and 4.
On the Central Line, Marble Arch continues to triumph as the busiest hotspot, with 7% market share of the hotel rooms booked in the capital so far this year. Average room rates at £140, however, reflect the high concentration of properties and competition in the immediate area.
As with the other main arteries in and out of London, the best bargains on the Central Line are to be had in Zone 3. There, rates can be as low as £79 a night for budget accommodation.
How hotel star ratings impact on cost
There is already a rich and diverse spectrum of hotel properties and chains to choose from, and the pricing between different star ratings differs significantly. The average cost of a two-star or three-star property in London along the main Underground lines will range between £105 and £130. A four-star will range between £120 and £170, depending on the location of each property and its proximity to the main transport hubs.
What happens next
London remains a market to watch closely, with overall room capacity in the capital expected to rise by 12% over the next three years, meaning room stock will exceed 150,000 rooms by 2018. There are approximately 90 new hotel openings and extensions planned in the pipeline for 2016 alone, which will result in an additional 7,000 new rooms in London this year.
Knowing the location of new properties, in conjunction with your current commuter routes, can provide new opportunities from an accommodation RFP perspective.
Do your prep – and ask the experts
As always, it’s the detail that makes the difference when negotiating your accommodation and meeting programme for 2017.
Taking advantage of average room rate analysis for key London Underground hubs, alongside average tube, train and taxi costs, not only provides useful insights into the total cost of travel associated with your programme. It also helps identify existing traveller behaviour and signposts opportunities for future savings, smart adjustments to office and event locations and improvements for commuter lifestyles.
Data analysis carried out by Laura Canto-Carrion, our market specialist analyst.
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