Market Spotlight Hotel – Edinburgh Q1 2024

Edinburgh’s hotel sector has outpaced the UK national average in revenue growth, according to new research from property services firm Cushman & Wakefield, showing a healthy performance for the first quarter of the year despite continued growth in hotel supply.

The Hospitality Market Spotlight report for Edinburgh, which looked at the city’s branded full-service hotels, shows revenue growth increased by 22% compared to Q1 2023. Gross operating profit per available room increased by almost 69% over the same period.

Growth in gross revenue (rooms, food and beverage) also outpaced costs, however, there was an increase in undistributed expenses despite a decrease in utility costs. In particular, wage costs rose by 11%, partly due to the increase in the national living wage.

Carl Ridgley, Head of Valuation and Hospitality Advisory at Cushman & Wakefield, said: “This is encouraging news for hoteliers in Edinburgh, especially as VisitScotland recently announced that Scotland broke its record for international visitor numbers last year. There was also an increase in the number of hotel investment transactions taking place in Edinburgh last year, which again was unique to the city compared to the rest of the UK, where the annual sales volume fell in 2023.”

Investment transactions worth more than £170m took place in Edinburgh’s hospitality sector last year, representing a 132% increase on the previous year.

There were six transactions in 2023 totaling approx. 934 rooms and major deals included the sale of the Crerar Hotel Group to Fairtree/Blantyre Capital and the acquisition of the Dalmahoy Hotel by Warner Leisure Hotels. In the UK, property transactions of almost £2.4 billion took place by hotel investors, involving 152 properties.

Murray Strang, Managing Partner, Scotland, Cushman & Wakefield added: “While the sector continues to face significant challenges, Edinburgh hotels remain attractive to investors, particularly in light of this encouraging revenue growth. This was due to strong trading in operational hotels and also recent acquisitions of new hospitality developments – mainly focused on the re-use of out-of-date office space in Edinburgh’s central business district.”

Access the full report here.

About Cushman & Wakefield

Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for property owners and occupiers with approximately 52,000 employees in nearly 400 offices and 60 countries. In 2023, the firm reported revenues of $9.5 billion from its core services of property, facilities and project management, leasing, capital markets and valuation and other services. It also receives numerous industry and business accolades for its award-winning culture and commitment to Diversity, Equity and Inclusion (DEI), sustainability and more.

For additional information, visit www.cushmanwakefield.com

Yana Lytvynchuk
Associate Director, Hospitality EMEA
+447765446938
Cushman and Wakefield

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