The hotel market in the Highlands is booming on the back of increasing interest from investors in the wake of the Brexit vote, according to commercial property experts.
A rise in overseas tourists looking to come to the region due to the weakness of the pound following the referendum is one of the main factors driving demand, says Ken Sims of Christie & Co’s hotels team.
Sims highlighted recent figures showing Inverness has this year seen a near 4 per cent increase in hotel occupancy and an 8.8 per cent jump in average room rate.
“The hotel sector is booming in the Highlands, performing better than it has been in several years,” said Sims.
“With banks offering a near negative return on deposits, the north of Scotland is becoming an increasingly attractive location for UK buyers as well as overseas investors.”
Sims said the levels of interest Christie had recently seen in the Shearings Dornoch and Gairloch hotels had underlined levels of demand.
“The hospitality market overall in the Highlands can offer an excellent return on investment, and it’s not uncommon to see a return in excess of 15 per cent for quality businesses,” he said.
As well as the fall in the pound making UK investments more attractive for overseas buyers, Sims said the Highlands hotel market was also benefiting from increasing popularity of the “staycation”. “This is particularly fuelled by people from the Central Belt looking for short-term breaks, with many of these being last-minute bookings,” he said.
Latest Scottish hotel market figures from LJ Research showed that September had been a bumper month for Edinburgh hoteliers but Glasgow saw stalling growth and Aberdeen continues to suffer from the impact of the oil downturn.
In Scotland’s capital, hoteliers sold on average 94 per cent of their rooms during the month. Highlighting strong demand for accommodation in the city. In Glasgow, however, there was evidence of shrinking occupancy and room rates during the month. Following four months of room occupancy growth, September performance for hoteliers in the Granite City was negatively impacted by the biennial oil and gas event – Offshore Europe – which took place last September.
Latest deals in the hotel sector in Scotland include the sale of the Stirling Highland Hotel to Newcastle leisure group Cairn as part of a portfolio of hotels. The deal for the five properties was valued at about £75 million.
Last week Christie put one of Perthshire’s most popular country house hotels, the Cairn Lodge Hotel in Auchterarder, on the market. The ten-bedroom hotel attracts visitors to the nearby Gleneagles golf courses.