Two hotel groups plan new investment in Scotland

Two companies have announced multimillion-pound investment plans to expand Scotland’s hotel market.

Events such as the upcoming Ryder Cup have meant two hotel chains are now looking to invest in Scotland. Picture: Ian Rutherford

Sandman Hotel Group is to transform a former university building into a four-star hotel, while Travelodge is looking for 10 new sites north of the border.

Sandman has bought the St Andrews Street building in Aberdeen from Robert Gordon University (RGU) in a deal which will allow the university to continue development of its Garthdee campus.

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It plans to invest more than £20 million to transform the building into a hotel complex with 220 rooms, a restaurant and convention facilities.

Nearly 80 new jobs will be created during the construction phase, with more than 150 within the hotel and restaurant operations, the group estimates.

Professor Ferdinand von Prondzynski, principal of RGU, said: “The sale of St Andrews Street to Sandman Hotel Group will provide major benefits to the city as well as RGU.

“The capital received will allow us to continue with the development of our teaching and learning facilities, providing our students with an outstanding educational environment.

“In addition, the city will benefit from a new four-star hotel and a development which will help drive forward the regeneration of Aberdeen’s city centre.”

First Minister Alex Salmond said it is “excellent news” for Aberdeen’s tourism industry.

He said: “While this new hotel will undoubtedly benefit business tourism in the Aberdeen area, visitor numbers from overseas markets continue to grow.

“The Sandman Hotel Group has seen the golden opportunity Scotland presents and I’m delighted to see them investing upward of £20 million in their new Aberdeen city centre hotel.

“This year of Homecoming will see the eyes of the world on Scotland as we host the Commonwealth Games, Ryder Cup and the MTV Europe Music Awards - not to mention the Scottish Open this week here at Royal Aberdeen.”

Meanwhile, Travelodge announced it is looking for new hotel sites across the country.

It said this represents an investment of £75 million and means the creation of 200 new jobs.

The chain is looking for sites in Oban, Peterhead, St Andrews, Aberdeen, East Kilbride, Falkirk, Hamilton, Motherwell, Wishaw and North Ayrshire.

Peter Gowers, Travelodge chief executive, said: “There is a big opportunity to further expand in Scotland. At present, the value hotel market in Scotland stands at 14%, compared to 18% in England and more than 30% in the US.

“By 2030, the budget hotel sector could account for almost a quarter of the UK market, with a similar level of growth expected in Scotland.”