Festival and cycling boost as Scotland’s hotel sector bucks UK downward trend

Scotland’s hotel sector managed to buck a downward trend elsewhere in the UK this summer as the Edinburgh Festival and a major cycling event drew in visitors.

Edinburgh's August festival season, including the ever-popular Fringe, helped boost the performance of the city's hotels.

The sector benefited from an increase in room rates, occupancy and gross operating profits during August, according to the latest hotels tracker from audit, tax and consulting firm RSM UK. The data, which is compiled and produced by Hotstats and analysed by the firm, shows average occupancy rates of hotels in Scotland rose from 82.9 per cent in July to 86.7 per cent in August, compared to a fall from 83 per cent to 79.6 per cent in the UK.

Average daily rates (ADR) of occupied rooms jumped from £150.85 (July) to £170.53 (August) in Scotland, while rates of UK hotels declined from £165.57 to £145.44 over the same period. Meanwhile, revenue per available room (RevPAR) - a key industry measure - saw a significant increase from £125.13 (July) to £147.81 (August) north of the Border, whereas this fell from £137.44 to £115.83 in the UK as a whole.

Claire Monaghan, a partner in RSM UK’s Edinburgh office, said: “August is typically the weakest of the summer months in the hotel sector, so it is really encouraging to see the uptick in Scotland’s occupancy rates, average daily rates and revenue per available room being ahead of the UK, indicative that demand remains strong. After seeing positive figures in May, the start of the summer holiday season in Scotland, it is great that August has continued this upward trend, which will be welcome news for Scottish hoteliers, especially as rising costs have continued to hit the sector.

“However, August rates will have been bolstered by more international tourists visiting the major cities in Scotland for a number of world-renowned events. With the Edinburgh Festival, and the UCI [cycling] championships taking place at the same time in Glasgow, demand for hotels increased rapidly, with limited discounts available due to this demand. The boost in visitors during this time period undoubtedly helped performance in Scotland’s hotel sector.”

A report earlier this week suggested that the UK has Europe’s highest hotel construction pipeline but demand is outstripping supply in Edinburgh.