Luxury brand hotels boost Edinburgh’s image - Roland Smyth

CMS joined with global strategic real estate advisor Avison Young last month to stage a joint event attended by 100 hotel industry professionals for insights on how the sector could further develop as it progresses from Covid through current economic challenges.

Avison Young presented findings from its recently released Scotland’s Hotel Market Overview report which highlighted the sector’s strong performance since the pandemic, especially in Edinburgh where its recovery was partly down to the city’s high proportion of premium brand luxury hotels. This has helped drive up ADR, the average daily revenue per paid occupied room, a key performance indicator within the sector. As Avison Young’s report highlights, ADR has increased due to the UK’s staycation boom with many people unable or reluctant to travel abroad choosing instead to holiday here.

With pandemic-related travel restrictions appearing to be largely behind us, there is now an ideal opportunity for Scotland to leverage further economic growth through continued investment in hotels, especially larger landmark brands. Despite the emergence of many new luxury brands within the city in recent years, Edinburgh in particular still often falls short in room capacity during peak tourism months. By further diversifying its offering, the city can further raise its game and benefit the wider Scottish tourism sector.

Recent experience shows that bringing landmark hotel brands into the Scottish capital can act as an economic catalyst. W Edinburgh, located within St James Quarter and set to open in late 2023, is a prime example. The hotel will bring something completely new to the city in terms of its luxury lifestyle positioning, attracting a new kind of international traveller for leisure and business. The hotel is a vital component of the development; its ‘halo effect’ has been key in attracting many high-end retail and leisure brands to Scotland for the first time and helping the Quarter deliver an estimated 3000+ new full-time jobs across a variety of sectors, many of these fulfilled from the harder to reach worker pool.

Roland Smyth, Head of the Scottish Hotels & Leisure Group at law firm CMS

W Edinburgh follows other landmark luxury brands including the Glasshouse Hotel, which opened in the early 2000’s alongside the Omni Centre, helping transform the top of Leith Walk. More recently, Chris Stewart Group’s The Edinburgh Grand, featuring 50 luxury serviced apartments, and the award-winning Gleneagles Townhouse, have played starring roles in the continuing renaissance of St Andrew Square – whilst Virgin Hotels Edinburgh, with its Commons Club bar/restaurant and all-day dining and entertainment venue, has enhanced the Old Town.

Meanwhile, the forthcoming 349-bedroom Hyatt Centric Hotel, part of the ongoing Haymarket redevelopment, promises to play a key role in transforming a formerly derelict west end site. Its location, near the Edinburgh International Conference Centre, will be critical in helping the city secure a larger share of international conferences and events.

With these developments playing such a pivotal role in economic growth, Edinburgh needs to consider its mindset. The majority of hospitality industry professionals surveyed at our event said the city is not always a welcoming place for hoteliers. While it can be challenging for locals to share their city with tourists from around the world at peak times, it’s important to remember that the business this generates is essential for economic growth and people’s prosperity. Having luxury brand hotels in the city also helps make Edinburgh a vibrant year-round destination which enhances every resident’s quality of life.

Roland Smyth, Head of the Scottish Hotels & Leisure Group at law firm CMS