London is the top performing hotel market in Europe having benefited from a weak pound and a relatively restricted supply of hotel bedrooms which has made the operational environment for existing hotels more favourable.

According to the results of Knight Frank's Hotel Operator Sentiment Survey 2011, there is a good supply of high-end bed stock available in the pipeline with the focus being on the West End and City. Trinity Square looks set to become the 'dormitory quarter' of the square mile with several recent new openings and further hotels planned.

In the regions, traditional tourist destinations such as Oxford, Cambridge, Bath, York and Edinburgh have all performed relatively well, due to their exposure to both commercial and leisure markets, but outside of the mixed segment sectors the market has struggled.

In general, the sector has issues to resolve, especially in some of the main regional cities, where business segment accommodation is in relatively strong supply. But two years on, from the depths of the recession, the sector overall has been performing as well as could be expected. Unsurprisingly, Knight Frank's results show a key split between more active and positive trading conditions in southern England and more difficult conditions further north.