RSM: Improving consumer confidence and Eras Tour boosts Scotland’s hotel sector in June

RSM: Improving consumer confidence and Eras Tour boosts Scotland’s hotel sector in June

Scottish hotels outperformed the rest of the UK in June, with occupancy and profits exceeding the national average, according to RSM UK.

The success was driven by Taylor Swift’s Eras tour, alongside improving consumer confidence.

The data, which is compiled and produced by Hotstats and analysed by RSM UK, shows occupancy of Scottish hotels was up slightly from 82.7% in May 2024 to 83% in June 2024, and ahead of pre-pandemic levels of 81.7% (June 2019). Scotland also overtook occupancy levels in UK hotels in June 2024 (81.9%).

Average daily rates (ADR) of occupied rooms across the UK reached their highest rate on record at £175.91 in June, up from £169.08 the same period last year. Scotland room rates also jumped in June, increasing to £173.46, compared to £147.25 in June 2023 and up from May 2024 (£153.08). RevPAR of Scottish hotels rose from £123.77 to £143.93 in June year-on-year.



Gross operating profits (GOP) of Scottish hotels were up from 42.7% (June 2023) to 45.5% (June 2024), also overtaking UK GOP for June 2024 (44.5%).

Stuart McCallum, partner and head of consumer markets in Scotland at RSM UK, said: “Scotland’s hotel sector continues to show its resilience despite the cost pressures faced by the industry and wet weather, despite the drier than average June across the rest of the UK.

“With Scotland’s gross operating profits edging above the rest of the UK in June, hoteliers will feel less of a squeeze as costs start to stabilise, following the increase to national minimum wage.

“Consumer confidence is slowly making a return and booking a UK trip appears to be top of the priority list, with Scotland likely to draw in more tourists throughout the summer due to the arrival of warmer weather and various events including The Open at Royal Troon and Edinburgh Fringe Festival.”

He added: “The new direct international flights to Scotland will also support the expanding premium hotel market throughout the summer, including Andy Murray’s Cromlix hotel, where we expect to see greater demand off the back of his high-profile retirement at the Paris 2024 Olympics.”

Thomas Pugh, economist at RSM UK, added: “The strength of accommodation prices takes a lot of the blame for services inflation rising back to 7% after dipping to 4.5% in January.

“The positive result for the UK hotel sector last month is another piece of evidence suggesting that the strong economic recovery continued in June. Indeed, it appears that improvements in consumer confidence and real disposable incomes are feeding through into stronger demand for hotel rooms.

“We expect consumer spending to continue to increase through the second half of this year and in 2025 as real incomes rise, which should further 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.”

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