Britain’s use of hotels to accommodate asylum seekers did not begin as a planned long-term policy. It emerged as an emergency response to a rapidly growing asylum backlog, a shortage of suitable housing and the disruption caused by the Covid-19 pandemic.
What started as a temporary measure has since become one of the UK’s most debated accommodation issues, affecting government spending, local communities and the hotel industry alike.
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Today, although hotel use is declining, the policy continues to shape discussions about the future of asylum accommodation.
How it all began
Before 2020, the UK mainly housed asylum seekers in rented houses and flats under what is known as the dispersal accommodation system. Hotels were used only occasionally during periods of exceptional demand.
That changed dramatically during the Covid-19 pandemic. Lockdowns slowed asylum interviews, appeals and immigration decisions. At the same time, the government remained legally responsible for accommodating asylum seekers who could not support themselves while waiting for their claims to be decided.
With thousands of applicants remaining in the system for longer than expected, existing accommodation quickly reached capacity. Hotels became the fastest available solution because they could be secured immediately without building new housing or negotiating thousands of individual rental agreements.
The pressure increased further as asylum applications rose sharply from 2021 onwards, driven by conflicts in countries including Afghanistan, Syria and Sudan, alongside a significant increase in small boat crossings across the English Channel.
The growing backlog meant more people required accommodation for longer periods, increasing reliance on hotels.
From emergency measure to national policy
Hotel accommodation was never designed to become a permanent feature of Britain’s asylum system.
Successive governments described it as a temporary contingency measure. However, delays in processing asylum claims, combined with rising arrivals and limited housing capacity, meant hotels remained in widespread use for several years.
At their peak, around 400 hotels across the UK were being used to accommodate asylum seekers, with daily costs reaching about £9 million, according to the Home Office.
The expansion created operational challenges for both government and the hospitality sector.
Many hotels entered government contracts that provided stable occupancy during periods when leisure and business travel had not fully recovered from the pandemic. For some operators, particularly independent properties, asylum accommodation became an important revenue stream.
Others later returned to the commercial market as tourism recovered.
The policy also attracted political debate. Local authorities raised concerns about community services, while hotel owners had to balance long-term government contracts against opportunities in the recovering travel market.
Industry groups noted that taking hotels out of the visitor economy reduced room availability in some destinations during periods of strong tourism demand.
Why hotels proved difficult to replace
Replacing hotel accommodation has proved more complicated than simply finding empty buildings.
The government must provide accommodation that meets legal standards while asylum claims are being processed. Suitable housing needs to be available at short notice, comply with local regulations and be distributed across the country.
These requirements have limited the speed at which hotels can be phased out.
The UK has also experienced wider housing shortages in both the private and social sectors, making alternative accommodation harder to secure.
As a result, although ministers repeatedly stated that hotels were only a short-term solution, they remained an important part of the asylum accommodation system for several years.
Government policy has since shifted towards reducing dependence on hotels by accelerating asylum decisions, expanding dispersal housing and using larger accommodation sites where appropriate.
The current government says the number of hotels has fallen to fewer than half the peak level and remains committed to ending their use during this Parliament. The proportion of asylum seekers living in hotels has also fallen significantly since its high point in 2023.
What it means for the hotel industry
For international hotel operators, Britain’s asylum hotel experience illustrates how governments can become significant buyers of hotel accommodation during periods of humanitarian or migration pressure.
The episode also highlights the commercial and reputational considerations involved in public-sector contracts.
While guaranteed occupancy can provide financial stability during weak market conditions, hotels participating in government accommodation programmes may face operational constraints, changing public perceptions and uncertainty over contract duration.
As the UK reduces its reliance on hotels, many properties are expected to return fully to the commercial market. Yet the experience has become an important case study for hospitality businesses worldwide.
It demonstrates how geopolitical events, migration trends, public policy and housing shortages can rapidly reshape demand for hotel rooms beyond traditional tourism and business travel.
