Transactions of Scottish boutique hotels hit £71m in H1

Scotland has seen transactions of independent boutique hotels reach £71m in H1 of 2023, accounting for 43% of all deals year to date, according to Savills. This compares to transaction volumes of just £54m for all hotels in the same period last year. 

This figure included the sale of a portfolio of seven four and five-star boutique hotels located across Ballater, Glencoe, Inverurie, Oban, the Isle of Mull, Inveraray and Nairn, that sold for £45m by funds advised by Blantyre Capital with its operating partner Fairtree Hotel Investments. 

Overall, the Scottish hotel market has seen a threefold increase in investment volumes so far in 2023, with transactions totalling £165m compared with £54m in the same period last year. 

Savills attributed this significant increase to the sale of the Waldorf Astoria Edinburgh, the Caledonian, which alone accounted for 51% of the total figure. Savills notes that this is against a backdrop of a 60% year-on-year decline across the UK hotel sector, proving the resilience of the Scottish market.

Steven Fyfe, director of hotel capital markets at Savills Scotland, said: “Boutique hotels offer the experience and impartiality we have all craved, particularly since the onset of the pandemic in 2020. This ever more popular sub-market offers plenty of differentiation and both consumers and investors alike are attracted to boutique hotels like never before.

“What’s more, it’s interesting to note that RevPAR growth is outpacing inflation, despite the assumption the two are closely correlated. The ongoing trend for staycations has seen Scotland become an increasingly popular holiday destination, therefore we expect figures to remain largely positive in the second half of the year.” 

He added: “However, we do not expect to see a continued jump in transaction volumes whilst we deal with ongoing economic uncertainty.”