The UK’s hotel sector could be hitting a glass ceiling and face uncertain times, according to a report from PriceWaterhouseCoopers.

The sector has been reaping the benefits of the strong economy and the average revenue par available room (RevPAR) is forecast to grow at a rate of 6 per cent until 2008 (between 9.2 per cent and 10.6 per cent in London).

Occupancy levels, however, have remained flat at around 75 per cent, suggesting that the growth is based on higher prices and the increase in demand for luxury accommodation and services.

Robert Milburn, sector leader for UK hospitality at PricewaterhouseCoopers, said: “We should see another tow years of good performance for the UK hotel sector but it will be highly dependent on London’s performance and as we know, the storm clouds may well be gathering on the back of the credit crunch currently occupying the headlines.

“One area that looks set for continued growth is the luxury hotel market. With room rate growth of 17.4 per cent, an increasing number of high net worth individuals and a more affluent mass consumer market, it is no surprise that major luxury hotel chains are jostling for position in the capital.”