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Hotel investment in Scotland has continued to perform strongly in 2024, with investment hitting £110m in Q3, up from £70m in Q2, marking a 150% uplift on the five-year quarterly average of £44m.According to the latest figures from Colliers’ latest Scotland Snapshot report, this means that the year-to-date investment total is £200m, 18% above the corresponding 2023 figure.
Colliers also found that there was strong interest in leisure-based hotels in popular locations, as well as larger hotels in built-up areas.
Major deals for the quarter included the purchase of Caledonian Hotel in Fort William, the Great Western Hotel in Oban and the Pitlochry Hydro in Perthshire, all acquired by Bespoke Hotels for an undisclosed sum.
In addition, Colliers completed another off market sale for Solley Hotels, selling Pitbauchlie House Hotel in Dunfermline to Smar Hotels Ltd.
Julian Troup, head of Colliers UK Hotels Agency, said: “These latest figures show that we’re continuing to see robust demand for hotel assets north of the border, with Scotland’s popular cities and stunning landscapes making it a desirable market for those looking to invest in UK regional hotels.
“Earlier this year our Hotel Market Index positioned Edinburgh as the top market in the UK, with Inverness and Glasgow also featuring in the top 10, reinforcing Scotland’s appeal as a sought-after location for investors.”
Oliver Kolodseike, director in the Research and Economics team at Colliers, added: “The overall landscape for Scotland presents a mix of challenges and opportunities, highlighted by fluctuating yields and sector-specific dynamics. We expect investor confidence to improve as interest rates are cut further over the next 12 months, resulting in a pick up in transactional activity.”
This week it was reported that hotels in Scotland were the “clear winners’ in a challenging hospitality landscape in 2024, outperforming the national average for revenue per available room (RevPAR) growth and average daily rate (ADR) growth, according to the latest data from CoStar.
The 12-month data through to October highlights that hotels across the region have managed to increase RevPAR by 8.5%, significantly ahead of the UK average, which is approximately 2.4% higher than 2023.
