A VISIT to the London Trocadero was once the highlight of many a tourist trip to Britain. Opened in 1896 just off Piccadilly Circus, it was one of the largest and grandest restaurants in the world. After a long decline it closed in 1965 and was gutted, before its formerly palatial interior was filled with tacky video arcades and tourist shops selling cut-price knick-knacks. Yet soon the Trocadero will be on the London tourist-map once again: surrounded in construction hoardings, a 583-room hotel is under development behind the grand frontage.

It is a symbol of the hotel boom currently under way in the capital. The number of hotel rooms has risen from 129,000 in 2013 to 149,000 today, according to PwC, a consultancy. There is still no sign of overcapacity. Last year occupancy rates reached their highest in a decade and average prices were higher than ever.

The hotels’ resilience is surprising, given the onslaught from sharing-economy websites and apps that allow people to rent out their spare rooms to travellers. According to researchers at Boston University, Airbnb, the biggest such service, has forced down hotel revenues in some American cities by as much as 10%.

By comparison, the impact of room-booking apps has been muted in London, says Marie Hickey of Savills, an estate agent. Only 0.5% of Londoners advertise their properties on Airbnb, compared with 2.4% of Parisians. One reason is that there is a shortage of reasonably priced residential stock near London’s main tourist attractions, which are hemmed in by offices and mansions. And according to a recent report by Citi, a bank, the growth of Airbnb listings in London and other big European cities is already slowing, meaning that Londoners’ spare rooms are unlikely to be able to soak up much more demand.

Hotels have also benefited from a change in the type of visitor coming to Britain. Whereas the strong pound has persuaded many tourists to divert to cheaper destinations (€1 now buys about 15% fewer Princess Diana postcards than it did five years ago), business travellers cannot avoid London so easily. So while tourist spending stagnated in 2015, businessfolk splashed out 7% more in Britain than the previous year, according to the Global Business Travel Association, an industry body, which forecasts further growth of 6% this year.

Unlike budget-conscious holidaymakers, who are willing to book a room in a stranger’s home on Airbnb to save a few pounds, most businesspeople are travelling on expense accounts and happy to splash out. Meanwhile their employers, citing a duty to ensure safety, remain wary of booking spare rooms, which they fear conceal slippery stairs, dodgy electrics and other hazards. This suits hoteliers nicely.

But not all of them. Business travellers may not yet be switching to Airbnb, but they are trimming their costs. More than half the new rooms built in London this year will be operated by two- or three-star budget brands. Even the once-glitzy Trocadero cannot escape that trend. Having made its name a century ago selling nine-course meals to the aspiring upper classes, in 2017 it will re-open—but as an Ibis budget pod hotel.