In May PWC predicted that, following three years of falls, revpar would improve by 4.2% across the country this year. It expected London revpar to rise by 4.5% and provincial revpar by 4.1%.

Now it believes that revpar growth will be closer to 8% this year, led by an 8.7% rise in the provinces and an 8% increase in London. Recovery over the next two years will continue to be led by regional hotels, which will see revpar rise by 10% in 2005 and 9.9% in 2006.

The report suggests that London revpar will not be too far behind, rising by 9% and 8.4% over each of the next two years. But it warns that London’s real revpar rate, when adjusted for inflation, remains at less than £40, well below the 1997 peak of £58.