RSM: Scottish hotels shine in November as festive season starts
Scotland’s hotel sector enjoyed a buoyant November, with occupancy rising to 78.1% from 74.6% the previous year, according to RSM’s Hotels Tracker.
The increase was fuelled by mild weather and the start of the festive season. The data, which is compiled and produced by Hotstats and analysed by RSM UK, also recorded a climb in average daily room rates to £121.97 from £108.42, and an increase in gross operating profits to 30.3% from 25.7% in November 2023.
Demand for travel also looks set to continue in 2025, as RSM UK’s Consumer Outlook shows 28% of consumers are planning a long-stay holiday in the UK this year, up from 25% last year, and 33% are planning a weekend away in the UK.
Stuart McCallum, partner and head of consumer markets in Scotland at RSM UK, said: “Scotland’s hotel industry remained buoyant in November, with a year-on-year boost in occupancy continuing the upward trend seen throughout 2024.
“The latest increase was supported by mild weather in November, as well as the start of the festive season with Edinburgh and Glasgow drawing in tourists from the UK and overseas as they launched their respective winter attractions. Despite the Christmas and New Year period being cut short due to adverse weather, with Hogmanay celebrations cancelled in Scotland, we still expect occupancy levels to remain strong moving into 2025.”
Mr McCallum continued: “It is clear holidays remain a priority for travellers, and this shows no signs of slowing down, with consumers continuing to plan trips in the UK and abroad in 2025.
“Last week, Emirates marked its inaugural flight from Dubai to Edinburgh, which will likely encourage more international footfall into the capital. The increase to room rates and gross operating profits also show things are heading in the right direction in Scotland, whereas the UK saw a plateau in these figures for the same period.”
He added: “However, hoteliers are moving into 2025 with some caution, particularly due to the added costs announced in both the Autumn Budget and Scottish Budget, with increases to employment costs and changes to business rates relief squeezing margins. Edinburgh is also set to introduce a tourist tax on visitors to the city, but we’re yet to see what this levy would entail if implemented.”
Thomas Pugh, economist at RSM UK, added: “After the economy contracted in September and October, a boost to the hotel sector in November increases our hopes that the economy rebounded that month.
“Any evidence of increasing room rates is likely to worry the Bank of England, which is already grappling with a trade-off between rising inflation and weak economic growth, as strong inflation in the hospitality sector was a key reason for sticky inflation last year.
“Overall, there are reasons to expect hospitality spend to increase this year. In the UK, households’ real incomes are set to continue rising, while there are also signs that the amount consumers are saving has peaked. This should mean that consumer spending grows in 2025. What’s more, the US economy is set to continue to grow strongly, which combined with a strong US dollar, will make tourism more attractive.”