Edinburgh named UK’s top spot for hotel development: two Scottish cities join top ten

Edinburgh has maintained the UK’s top spot for hotel development while Inverness and Glasgow have joined the top ten rankings, a new report reveals.

Property firm Colliers’ hotel market index analysed the performance of 38 UK cities across ten performance indicators including occupancy figures, average daily room rates, RevPAR (revenue per available room) growth, development costs, land prices and market appetite. The latest index compares 2022 data against 2019 and included Inverness for the first time, which went straight into position six, while Scotland’s largest city Glasgow climbed ten places to eighth position.

Marc Finney, head of Colliers hotels and resorts consulting, said: “Throughout the tumultuous last few years Scotland has maintained its popularity amongst domestic and international tourists looking for scenic and tranquillity which Scotland has in abundance, with deep heritage and history. Edinburgh has stayed in the top spot of our ranking thanks to its appeal as a popular leisure destination and secure underlying market fundamentals for investors.

“This year we’ve also examined locations for further development potential and highlighted Inverness as a key market for opportunity, thanks to its strong RevPAR performance and favourable land prices when compared to other markets. Inverness is closely followed by Edinburgh in this measure as well. Meanwhile Glasgow was one of the highest climbers in this year’s ranking thanks in part to its international exposure during the COP26 conference during 2021, as well as becoming a popular city for offices of major corporations helping to shore up its growth with commercial travellers as well as holidaymakers,” he added.

The report noted that, in recent years, leisure markets have been leading the pack as the industry recovers from pandemic closures and tiered re-openings, although with business travel returning city centre locations have also made a strong return in 2022. A continued recovery has been observed during the first quarter of 2023.

Siddhika Shah, associate director in the Colliers hotels department, added: “Investors are already interested in the Scottish market, and we are seeing a solid interest in hotel development in Glasgow, which has a strong active pipeline to replenish the city’s aging stock.”