The predicted growth comes after three years of consecutive falls in revpar during 2001, 2002 and 2003. The turnaround will be sharpest in London, where revpar is set to grow by 13% this year, followed by 9% in 2005 and 7% in 2006.

Jonathan Langston, managing director of TRI, said: 'Although London was hit hardest in the most recent downturn, the rate of bounce-back we are predicting is remarkable, particularly given our low-inflation environment.'

Outside London, the recovery will be steadier, says TRI, reflecting the fact that the provincial market was less affected by the downturn as it is more reliant on guests from within the UK.Revpar in the regions is forecast to increase by 5% this year, with similar increases in 2005 and 2006.