Edinburgh has been named as the UK’s most attractive location for hotel investment outside London for a third year running by a key survey of industry leaders.
The Scottish capital now ranks alongside the likes of Rome and Lisbon as European hotspots for investment, the annual survey of more than 100 industry leaders by Deloitte revealed.
Investors from China and North America are likely to capitalise on the weakness of sterlingNikola Reid
A total of 47 per cent of respondents named the city as the most attractive UK hotel investment destination outside London followed closely by Manchester (46 per cent).
The survey also found that Chinese and North American investors are expected to dominate the European hotel investment market in 2017. Some 62 per cent of respondents see China as the biggest source of inbound investment into Europe, up from 51 per cent last year.
Hotel executives said they were optimistic about investment opportunities in the sector, with more than a third believing that the European investment cycle is 12-18 months way from peaking. Close to 60 per cent of respondents see disposals and consolidation as prominent investment themes in the next year.
Nikola Reid, director in Deloitte’s hospitality advisory team, said: “It is reassuring to still see clear signs of optimism. Investors from China and North America are likely to capitalise on the weakness of sterling and still see the Continent as offering potential.”
This year’s report shows that Amsterdam has usurped London’s position as the most attractive hotel investment destination in Europe after more than a third (34 per cent) of respondents ranked the Dutch capital in the top spot. London (32 per cent) had held the number one ranking for the last two years. Barcelona (28 per cent) and Dublin (24 per cent) followed, with Berlin and Madrid (both 18 per cent) joint-fifth.
Reid added: “Concerns around supply and uncertainty as to corporate sentiment in particular led to London narrowly missing a hat trick; nevertheless, the city remains a standout destination.”
Edinburgh has seen a significant number of investments and plans announced for new hotel projects this year. Israeli-based Leonardo Hotels made its first move into the Edinburgh market, buying a site which has been operated as a Premier Inn on Morrison Link near Haymarket station. Netherlands-based Carlton Hotel Collection also announced its first venture in Edinburgh with a four-star site on Market Street. Luxury brand W Hotels confirmed it will open its first Scottish property in the St James development and the four-star Crowne Plaza hotel was sold to an unnamed high net worth investor.
Figures from LJ Research last month revealed that the average hotel room rate (ARR) in Edinburgh hit £181.96, the highest figure on record. BDO’s annual hotel survey also found that Edinburgh last year recorded the fifth highest revenue of any city outside London.