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Scottish hotels have strong year despite dip in visitor numbers, study finds

Edinburgh remained the city with the highest occupancy rate in Scotland in 2018, according to BDO’s Hotel Britain report.

Airport passenger numbers at Edinburgh were up by 6.7% (Jane Barlow/PA)
Airport passenger numbers at Edinburgh were up by 6.7% (Jane Barlow/PA)

The hotel market in Scotland remains strong despite lower visitor numbers to Britain, according to a new report.

BDO’s Hotel Britain report found 1,689 rooms opening across Edinburgh and Glasgow last year, with a yield growth of minus 6.3% compared to 0.7% in Wales, 0.5% in England and minus 6.4% in Northern Ireland.

Despite a 2.5% drop in visitors, Edinburgh remained the city with the highest occupancy rate in Scotland (83.1%) and the third best outside of London.

Glasgow had a decrease of 0.5% to 82.8% while Aberdeen’s rate rose 6% to 67.2%.

Looking ahead, Scotland has an active pipeline with well over 1,600 hotel rooms expected to open during 2019 Martin Gill, BDO in Scotland

Martin Gill, partner and head of BDO in Scotland, said: “2018 has been another strong year for hotels in Scotland.

“Glasgow was the top performer, whilst Aberdeen is showing signs of improved levels of activity.

“The Scottish hotels market has seen a boom in recent years with a lot of investment activity which has resulted in a number of new hotels.

“The large increase in supply has satisfied that increasing demand but there is still a lot of room for potential growth.”

He added: “Looking ahead, Scotland has an active pipeline with well over 1,600 hotel rooms expected to open during 2019.

“The strong performance demonstrates the industry’s robustness despite facing continued EU uncertainty and an increase in supply.”

It was the first time in eight years that visitor numbers decreased but this is expected to reverse this year, with an additional one million people visiting in 2019.

Airport passenger numbers at Edinburgh were up by 6.7% for the year but down 2% in Glasgow.

Mr Gill added: “While the Government’s focus is on the UK’s economic future, hotel brands and owners have a number of competing priorities on their agenda, most notably investing in the right technology, managing a EU-heavy workforce and overcoming competition from online platforms.

“With international visitor numbers forecast to increase in 2019, together with a reduced pipeline of new hotels, I do not foresee any major shocks for the sector.

“Inevitably there will be challenges ahead but I’m confident the Scottish hotel industry will continue to experience growth over the next 12 months and investor appetite will remain strong.”

PA

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