Boost for Edinburgh from events and new flight routes

Edinburgh’s hotels can look forward to improved average room rates when Scotland stages the Commonwealth Games later this month and the Ryder Cup in September, according to a new report from global hotel consultancy HVS London.
 
Demand from corporate bookings and additional flight routes are expected to lift the city’s hotels out of what has been a comparatively difficult seven years of trading that saw RevPAR drop 31 per cent, the report notes.

The news comes as Glasgow room rates shot up by 12 per cent before its hosting of the Commonwealth Games.
 
Growth in the number of new limited-service hotels, the recession and the impact of the London Olympics have all hit the capital’s hotels hard in recent years.
 
Now HVS paints a rosier longer-term picture, with an additional 15m passengers expected to visit Edinburgh over the next five years as a result of EasyJet’s new flights from European destinations, and a new Air Canada Rouge route from Toronto.
 
A regular calendar of sporting and cultural events can also be relied on to bring more than eight million people a year to Edinburgh and Lothian, the HVS concludes.
 
While the Average Daily Rate (ADR) achieved by the city’s hotels is consistently above £60, excluding January and February, with occupancy at more than 70-90 per cent, the high volume of new limited-service hotels has prompted an overall decline in the city hotel sector’s ADR.
 
Hotel occupancy declined to 76 per cent in 2008, climbing to 80 per cent in 2011 before dropping again in 2012 when London staged the London Olympics.
 
The new HVS report says that, beyond 2015, hotels are expected to see a further growth in occupancy and improved RevPAR and ADR.
 
“After a challenging operating period we anticipate a much more subdued increase in overall RevPAR in Edinburgh’s hotels as the upscale market competes with the new limited-service hotel inventory,” says report author Harry Douglass.
 
“Edinburgh remains an attractive market for investors, with high barriers of entry and one of the highest RevPARs in Europe. However, investors should be aware of the requirement to employ dynamic management to maintain market share. Intense competition from a range of hotels means operators need to work hard to maintain bookings and to ensure they are fulfilling guest expectations.”
 
In Focus: Edinburgh Hotel Market. Homecoming Scotland 2014 by Harry Douglass MRICS can be downloaded at http://www.hvs.com/article/6962/in-focus-edinburgh-hotel-market/.
 
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Paul Colston

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Paul Colston

Managing Editor, Conference News & Conference & Meetings World.

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