The hotel and tourism industries in Scotland achieved significant growth in 2017, despite the uncertainty surrounding the Brexit vote, according to property consultant GVA’s Hotels Economic and Property Market Review.
International tourist numbers to Scotland contributed to increased investor interest, rising 14.6 percent to 1.26 million in the first nine months of 2017. However, VisitScotland data showed domestic tourist numbers dropped 5.5 percent to 8.29 million during this period.
This boost in tourism supported the increase in hotel industry performance up last year, especially in Edinburgh, Glasgow and Inverness. Edinburgh scored the highest results, with a 12.4-percent rise in RevPAR and an increase in ADR to more than £100. Glasgow’s occupancy rose 2.5-percent to 82.1 percent, driving the 5.2-percent increase in RevPAR for the year. Meanwhile, Inverness scored high performance levels with a rise in occupancy from the more than 83 percent recorded in 2016 and an 8.1-percent increase in ADR to £81.77. Demand in the Scottish Highlands also rose last year in response to the TV show Outlander and the launch of the tourism development initiative North Coast 500.
Strong hotel performance in the country has helped to attract investor interest. Hotel investment transactions rose to more than £240 million last year, jumping 60 percent from them £142 million reached in 2016. Overseas investors, especially those from the Middle East and Far East, took advantage of the exchange rate, leading these buyers to contribute to a major portion of the investment in 2017. Andrew Renouf, director of retail, hotels and leisure for GVA in Scotland, said in a statement, “The hotel sector across Scotland has benefitted in 2017 from the continued weakness of Sterling in currency markets, coupled with the very high profile of destination Scotland around the world. Further expansion of both Glasgow and Edinburgh Airports will continue to open up new markets, with a direct route to China high on the agenda. We have seen high levels of investment and development appetite in key locations as a result of this, and hope that the fundamental market strengths outweigh any impacts of a slowing of the economy highlighted in the latest Scottish Government State of the Economy report."
Last year's hotel transactions include M&G Real Estate's purchase of Courtyard by Marriott Edinburgh for £23.2 million in April and the sale and leaseback of the Safestay Edinburgh to U.S.-based PGIM and British Virgin Islands-based International Hotel Properties’ acquisition of the Holiday Inn Express in Edinburgh.