Tourist boost pushes Scots hotel prices up 17% in July

ACTIVITY in Scotland’s hotels market looks to be returning to pre-recession levels after a fourth consecutive month in which the sector north of the Border has outperformed the rest of the UK.

Taken as a whole, Scottish hotels boosted revenues by 16.8 per cent in July. Picture: Getty

The latest figures from the monthly report by accountancy firm BDO show Edinburgh leading the way, with rooms yield – the industry term for revenue – second only to that achieved in central London.

Taken as a whole, Scottish hotels boosted revenues by 16.8 per cent in July, far outstripping the 4.9 per cent average for the UK.

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It marks the fourth month in which Scottish hotels have outpaced their UK counterparts. Revenues have also climbed throughout that period, including double-digit increases in April and May.

Alastair Rae, a partner at BDO, said this latest survey proved that Scotland’s hospitality sector is enjoying a much better year than in 2012, with the market for leisure travellers looking particularly strong.

“These figures are very positive and, given that we have had several months of improving revenue and occupancy, would tend to support the view being aired that the sector is returning to its pre-recession performance,” Rae said. “While some of the figures are now higher than in July 2007… it should be remembered that inflation and rising wage and operating costs will have reduced the benefit of current higher revenue figures. Nevertheless, the good news is that the data seems to be pointing in the right direction.”

Revenue in Edinburgh was 32.3 per cent higher than in July 2012, reaching a room average of £86.84. That topped the £81.69 reported in July 2007, immediately before the banking crisis.

Revenue in Aberdeen was up 22.7 per cent year-on-year, to an average of £73.12 from £59.60 previously. Inverness hotels reported growth of 8.3 per cent to £67.62.

However, Average revenues across Glasgow hotels dropped 1.9 per cent on the previous year to £48.79. This was partially offset by a 1.7 per cent increase in occupancy.

While Aberdeen has benefitted from the booming oil market, Rae noted that hotels in Glasgow are “heavily influenced” by the event and conference market. Meanwhile, Edinburgh and Inverness are riding tourism’s rising tide.

“The increase in revenue in Edinburgh by a creditable 32.3 per cent in July coupled with an increase in occupancy of 12.3 per cent shows just how strong the sector has performed in the city,” he said.

“July sees the start of the festival season in the capital with the Jazz and Fashion festivals contributing to the positive figures. Meanwhile, Inverness revenue rose by 8.3 per cent and occupancy by 7.7 per cent, showing that the tourist market has returned to Scotland.”

BDO’s hotel survey has been published since the 1970s, and includes data from a range of three- and four-star establishments.