Thursday, June 13, 2024
Thursday, June 13, 2024
HomeNewsBusiness NewsScottish hotel market set to grow in 2023

Scottish hotel market set to grow in 2023

Hotel transaction volumes in Scotland totalled circa £149 million (transactions over £1 million) across 24 key deals in 2022, according to the latest research from Savills. The figure represents a 34% decrease on 2021 (£226 million).

The figures, say the company, reflect the wider macroeconomic conditions including rising debt costs which impacted the UK hotel market, where overall investment volumes are down 27.5% year on year (YoY).

However the firm is predicting that year end volumes for 2023 will reach £200m which although not as healthy as 2021, are well ahead of 2022 figures.

Steven Fyfe, Hotel Capital Markets director at Savills Scotland, comments, “While the second half of the year was challenging, in terms of transactional volumes, H2 was marginally stronger than H1 in Scotland, demonstrating the ability to complete transactions in a difficult market.

“We are seeing stability starting to return to the market as we begin the new year with a number of sale processes underway. In terms of investment volumes, we expect a strong start to the year, with year-end volumes anticipated to reach £200 million.”

Savills says Scottish hotel transaction volumes in 2022 reflected around 5% of overall UK volumes (£3 billion). Domestic UK buyers represented approximately 72% of transaction volumes, with the remaining 28% comprising international buyers.

Key individual transactions in Scotland include: Premier Inn Glasgow, Buchanan Galleries (c. £30.2 million, 210 keys); Fonab Castle, Pitlochry and Former Park Inn Glasgow (c. £4.5 million).

Key portfolio transactions incorporate the Chardon Portfolio, which saw Atlas, supported by L&R Hotels, acquire the Chardon Group, including Holiday Inn Glasgow Theatreland, Holiday Inn Express Glasgow, Holiday Inn Express Edinburgh and Royal Mile, Holiday Inn Express Edinburgh Airport.

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