London's hotels have not suffered as much as was feared following July's terror attacks, according to new figures.

Data from accountants PKF shows a small decline in occupancy levels last month with room rates holding steady.

Occupancy in the Capital's hotels dipped to 79.4%, down 4.9% on the same month last year. Average room rate, however, rose 1.2% to £105.01, while room yield fell 4.8% to £83.37.

Outside London, occupancy levels fell by just 0.7% to 76.9%. The average room rate was £65.48, up 2.4% compared to July 2004 with room yield also up by 1.7%.

Robert Barnard, partner for hotel consultancy services at PKF, said: "Considering the global impact of the terrorist attacks on London during July, hoteliers have done well to keep the loss down this much.

"We are confident they can bounce back during August and September."

Following the bombings on July 7 some hotels were accused of hiking up prices to cash in on commuters stranded in London by public transport delays and cancellations.

PKF, however, said these allegations were not supported by the figures which showed room rates hardly moved during the month.

The Tourism Industry Emergency Response Group predicts spending by overseas visitors to the UK during 2005 will be down 2% on initial expectations as a result of the explosions.

This would result in a £150 million shortfall for the Capital's tourism industry.