Glasgow’s hotels sector growing eight times faster than the rest of the UK

Written by Michelle Rodger

Glasgow’s hotels sector is growing faster than in any other city in the UK as it capitalises on its popularity for conference and sporting events.

The average cost for an overnight stay in Scotland’s largest city climbed 7.5% in the first half of 2018 with occupancy rates increasing to 79.1%.

PwC’s latest Hotels Forecast report shows that the average daily rate (ADR) in Glasgow climbed to £73.41 from £68.31, while the key revenue per available room (RevPAR) benchmark rose 8.2% to £58.08 – eight times the pace of growth in the UK overall.

Both the occupancy rate and revenue generated per available room in Edinburgh have fallen, though it remains the most expensive city outside London for an overnight stay.

RevPAR in Edinburgh fell 1.6% to £73.68, as occupancy dropped by 2.1% to 78.4%. In spite of this, the costs of staying overnight in the city increased by 0.5% to £93.92 – second only to the average daily rate in London of £141.16.

In Aberdeen, the ongoing recovery in the oil and gas sector led helped RevPAR grow 4.7% to £35.85 but while occupancy rates increased by 4.7% they remain low, at just 63.5%.

Liz Hall, head of hospitality and leisure research at PwC, said: “Glasgow’s reinvention as a modern city with international appeal for both tourists and businesses continues, with the city’s hotels showing an impressive performance, driven by the 7.5% increase in average daily rate as more four-star hotels open.

“The performance of Glasgow’s hotels sector highlights the extent to which the city is now seen as a major tourist attraction with the number of international visitors increasing by a fifth to 787,000 in 2017.

“In Edinburgh, RevPAR remains the second highest of all UK cities, but this and occupancy rate have slipped probably as a result of new room supply and also competition from the home share market  and serviced apartments.

In the first half of 2018 there was almost £400 million investment in hotels in Scotland, more than doubling the 2017 total in six months. The largest deal was the £85m sale of the Caledonian Hotel to Abu Dhabi-based Twenty14 Holdings.

And there is no sign of a slowdown in the number of new hotels opening. In Edinburgh, new openings include the Courtyard Edinburgh while many major names such as The Balmoral, have seen increased investment. At the more novel end of the scale, a floating hotel named The Fingal is set to open in the autumn.

In Glasgow, new openings by Radisson Red, Motel One, Ibis Style and Marriot’s Moxy Hotel on High Street have increased available rooms, while in both the International Financial Services District and nearby the Scottish Exhibition Centre, further developments are under way.


About the author

Michelle Rodger

Michelle is a former national newspaper journalist who co-founded an award-winning IT business before launching Tartan Cat Communications. A social media and crowdfunding expert she manages media and communications for Business for Scotland.

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