Tuesday, May 21, 2024
Tuesday, May 21, 2024
HomeNewsBusiness NewsAvison Young release latest Hotel Market Overview

Avison Young release latest Hotel Market Overview

Avison Young’s latest Hotel Market Overview, released last month, suggests that hotel performance in Scotland midway through the year continued to recover at pace due to the return of international travel alongside large conferences and events.

The Hotel Market Overview looked at trends in Glasgow, Edinburgh, Aberdeen, Inverness and Scotland as a whole. The hotel recovery is driven by Average Daily Rate (ADR), with demand (occupancy) still behind 2019 across the board.

Exceptions were Aberdeen’s upscale hotels, East Lothian and Renfrewshire where year to date occupancy is equal to or higher than in 2019. The former is driven by the energy sector with Aberdeen’s corporate market less affected than in other cities, with the latter two most likely benefiting from lower rate overspill demand as the main cities push room rates higher.

Avison Young’s Hotels team found that Scotland as a whole is performing well, with revenue per available room in line, or ahead of 2019, in most cases. Edinburgh has seen a quicker recovery than Glasgow for two main reasons.

Firstly, the proportion of high-end and luxury hotels in Edinburgh is helping to drive ADR higher. Secondly, Glasgow has seen a 9.9% increase in supply since January 2020 whilst Edinburgh supply has increased by only 4.4%, impacting Glasgow’s recovery as it absorbs the new supply.

Airport passenger numbers show demand ramping up towards 2019 levels at Scotland’s main airports, highlighting the correlation between improved hotel performance and increased travel.

Transactions of hotels in Scotland have also picked up pace. Andrew Renouf of Avison Young said, “There is no shortage of interest in Scottish hotel assets, with a large amount of private equity ready to be placed in the sector and a number of deals having completed since late 2021.

“Edinburgh continues to be a sought-after destination and investors are seeking to benefit from the market’s post-pandemic recovery by acquiring high quality, city-centre assets.”

Andrew Renouf, said:“Overall, it has been an encouraging period for the hotel sector in Scotland, however clear challenges remain and will likely continue into 2023 and beyond.”

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