Quality hotels in the capital showed an average occupancy of 75% up to the end of July compared with 77.9% last year. Hotels have suffered particularly from a softening in US visitors, which provide a high proportion of take-up at the upper end of the market. In addition, the outbreak of foot and mouth disease has also played an indirect role in reduced numbers of visitors.

Arthur de Haast, managing director of Jones Lang LaSalle Hotels in Europe, notes, 'While London has not been directly affected by the foot and mouth crisis, negative publicity in the US has caused a drop in visitor numbers to the capital, the first point of arrival for many leisure visitors in the country.'

Room rates are also suffering. Rates for top flight accommodation averaged £225.99 ($328) for the seven months to July, 1.2% down on last year. De Haast says, 'While mid-market hotels have maintained business, those at the top end have felt the effects of the downturn much more.'