Hogmanay cheer: Edinburgh hotels lead UK for revenue performance on New Year's Eve

Experts highlight capital’s “growing international reputation” coupled with city’s appeal to domestic visitors.

RevPAR, or revenue per available room, grew by an average of 12 per cent in Edinburgh, as rates reached £284, according to the latest figures.

Edinburgh hotels have reason to celebrate after leading the festive season revenue charts.

New Year’s Eve saw hotels in the Scottish capital experience the highest year-on-year RevPAR growth across the major UK markets. RevPAR, or revenue per available room, is seen as one of the industry’s key measures of performance. In Edinburgh, it grew by an average of 12 per cent, as rates reached £284 and average occupancies hit 92 per cent, according to new figures from CoStar Group.

It said Edinburgh’s “growing international reputation” coupled with the city’s appeal to domestic visitors continued to support local hotels, while regulation around short-term lets “may be positively impacting” hotels too. Meanwhile, London RevPAR was only slightly behind Edinburgh in absolute terms, while revenues saw a 9 per cent uplift over the previous year.

Looking at the UK in general, the firm noted that while Christmas tends to be a quieter period for hotels, occupancy and rates still grew during Christmas Day and Boxing Day. The weekend just before Christmas achieved the highest year-over-year RevPAR growth, however, likely driven by last-minute shoppers and getaways, it added.

Six of the major cities examined experienced RevPAR declines on an annual basis, largely due to losses in pricing. Birmingham, Newcastle and Manchester stand out as the underperformers as RevPAR across these locations experienced a drop of more than 10 per cent. Although Liverpool hotels did not take as much of a hit, average rates declined by 7 per cent during New Year’s Eve with some losses being slightly offset by occupancy gains.

Looking ahead, the report noted: “The outlook for UK hotels for 2024 looks broadly positive. The divide between international cities like Edinburgh and London may become more prominent, however, as these destinations benefit from greater international visitation.

“Regional cities largely reliant on domestic demand, especially leisure-led business, could face challenges in driving average rates should consumers become more price sensitive and selective over their experiences. Above-average supply growth in locations such as Glasgow and Liverpool further pose supply-side risks that could affect performance in the year ahead.”

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