Scotland’s luxury hotel market recorded stronger growth in room rates and profits last year than the wider UK sector, according to the latest RSM Hotels Tracker: Focus on Asset Classes.
Data compiled by Hotstats and analysed by RSM UK showed average room rates rose across all hotel categories in Scotland in 2025, with the strongest growth seen in the luxury segment. Luxury room rates increased 12%, rising from £287.79 in 2024 to £321.86 in 2025. That compared with a 6% year-on-year increase across the UK, where luxury room rates rose from £358.69 to £379.14.
Scotland’s mid-market hotels saw average room rates rise 2%, from £124.59 to £127.22, while budget hotel room rates increased 3%, from £106.23 to £109.73. Across the UK, mid-market room rates rose from £135.75 to £141.82, while budget rates fell from £97.77 to £95.83.
Gross operating profits per available room also rose sharply in Scotland’s luxury hotel market, up 13.5% from £123.81 to £140.59. By comparison, gross operating profits per available room across the UK luxury market were largely flat at £127.53 in 2025, against £127.50 the year before, while London luxury hotels saw GOP PAR fall from £154.69 to £150.99.
Occupancy also improved in Scotland’s luxury and mid-market segments. Luxury occupancy rose from 69.8% in 2024 to 73.0% in 2025, while mid-market occupancy increased from 78.5% to 80.7%. Budget hotel occupancy was broadly unchanged, moving from 77.6% to 76.9%.
Katie Morrison, partner and head of consumer markets at RSM in Scotland, said, “The luxury hotel market remained particularly buoyant last year despite some challenging headwinds, including increasing wage costs, rising food prices and high energy bills. Average room rates in the luxury market saw a healthy increase, and gross operating profits per available room were up considerably.
“Average room rates for the budget hotels were not much lower than mid-market, as budget hotels were forced to increase room rates to cover rising costs. This has clearly impacted budget hotel occupancy rates, which have remained static.
“These trends correlate with what we’re seeing among clients, with luxury hotels in Edinburgh and St Andrews attracting a clientele that’s happy to spend money on luxury experiences, while budget hotels struggle to increase occupancy. This may seem counter-intuitive in the current economic climate. However, guests are prepared to splash out on high-end experience hotels offering extra facilities such as swimming pools, gyms and golf courses, rather than budget hotels that offer little additional benefits. Price savvy travellers have realised those who book budget hotels often spend more on wider attractions, food and other expenses, increasing overall costs.
“Many luxury hoteliers in Scotland use vouchers for package deals to get people through the door. Although some of these may be loss-leading, these deals boost occupancy rates, which is preferrable to leaving rooms empty.
“As geopolitical tensions in the Middle East lead to energy price increases, consumers will continue to be budget-savvy, while hoteliers are likely concerned about the impact of energy price rises on their bottom line. A 30% increase in business rates coming soon will also add further pressure.
“Cultural and sporting attractions such as the Commonwealth Games, Edinburgh Festival and Royal Military Tattoo should ensure a steady flow of visitors throughout 2026 though, as these large events unique to Scotland keep visitors returning year after year.”
