‘Highly sought-after’ Edinburgh takes top spot in UK for hotel performance

Inverness continues its ascent up the ranks and is now firmly established in third place.

Edinburgh has grabbed top spot in the UK for the performance of its hotels, making it a “highly sought-after” market for investors.

Publishing its annual UK Hotel Market Index, commercial property consultancy Colliers said the Scottish capital had been ranked number one due to its strong performance in both occupancy and average daily room (ADR) rate during 2023, as well as its “impressive” revenue per available room - RevPAR - growth since 2019. After its initial entry into the top ten during last year’s index, Inverness has continued its ascent up the ranks, now firmly established in third place.

Colliers said this growth had been supported by the “increasingly strong appeal of Scottish destinations to visitors” which has resulted in solid performance metrics, together with a limited pipeline of new hotels under construction and favourable build and land costs.

Colliers said Edinburgh had been ranked number one due to its strong performance in both occupancy and average daily room (ADR) rate during 2023, as well as its 'impressive' revenue per available room.

Marc Finney, head of hotels, resorts and consulting at Colliers, said: “The data in our third annual report reveals the ever-evolving nature of the UK hotels market. Our index is formulated in such a way that high land and construction costs and sluggish hotel market growth are penalised. That’s why some markets will rank lower than expected.

“Of course, this is a general market index and site-specific factors, and market condition, will lead to significant variances. What has been interesting to note this year has been the shift back to the city break as opposed to the countryside staycations which were popular during the pandemic.”

Among the other cities in the top ten, Belfast took second place, while York and Oxford were ranked fourth and fifth, respectively. London took seventh spot while Glasgow was placed eighth. The research is compiled from analysis of nine key performance indicators including land prices, build costs, room occupancy, average daily rates and room occupancy rates. The ratings are then consolidated and ranked to show which markets are “desirable” locations for investors to acquire an existing hotel or develop a new one.

Yvan Gravier, a consultant in Colliers’ hotels advisory services team, added: “This report helps us to provide the right advice for investors looking to expand their portfolios in the UK, taking into consideration the local challenges and prospects for the market.”