Visitors shrug off May rain to lift Scotland’s hotels – Daily Business

Wet early summer weather did not deter visitors from heading to Scotland which saw its hotels outperform the wider UK market in May.

A new report also predicts the momentum to build following the record-breaking attendances at the three Taylor Swift concerts at Murrayfield stadium in early June.

The Edinburgh Marathon Festival was once again a big draw despite being held in torrential conditions.

The latest hotels tracker from accountancy firm RSM found that the gross operating profits (GOP) of Scottish hotels in May rose to 42.6% from 37.4% in the same month last year, surpassing the 38.9% figure for the UK. In April the Scottish figure was 26.7%.

Occupancy at Scottish hotels jumped to 82.4%, higher than the UK’s 79.6%, and up from 79.4% 12 months previously.

Furthermore, Scottish hoteliers saw revenue per available room (revpar) increase to £127.48 in May from £109.95 in May 2023 and £88.23 in May 2019, before the pandemic.

Stuart McCallum, partner and head of consumer markets in Scotland at RSM UK, said it was “certainly another strong month for Scottish hoteliers”, who enjoyed “another encouraging monthly boost” amid the hottest May on record.

“As consumer confidence continues to improve, the addition of two bank holidays will have bolstered occupancy in May, helping hoteliers to offset cost pressures following the recent national minimum wage hit,” he added.

“This upward trend is likely to remain throughout the summer months, especially with the arrival of warmer weather and various international events including The Open at Royal Troon, Edinburgh Fringe Festival, and Taylor Swift’s Eras tour.

“Scotland is also starting to attract more international tourists to cities outside Edinburgh, as the introduction of new direct flights from the US and China enhances global connectivity.

“This is enabling Scottish hoteliers to offer new premium experiences to a wider market, including whisky tours and golf breaks.

“While UK hotels are seeing room rates plateau, this new tourist market is boosting room rates, profits and revpar in Scotland, allowing businesses to rebuild their balance sheets post-Covid, and invest in higher-quality products.”

Thomas Pugh, economist at RSM UK, added: “The positive results for the UK hotel sector in May is another piece of evidence pointing to a strong rebound in May after a bleak April.

“We expect consumer spending to continue to improve through the second half of this year and in 2025 as real incomes rise, which should support demand for hotel rooms.

“However, with inflation in the accommodation sector running at around 7%, compared to 2% inflation overall, price pressures in the industry are clearly still an issue.”