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Scotland’s capital has continued to dominate the UK hotel market, securing the first position in the 2025 Colliers UK Hotel Market Index.
According to Colliers, Edinburgh’s occupancy rates (85%), strong Average Daily Rate (ADR) growth (up 10% from 2023), and RevPAR performance (up 13% on the previous year) makes it an “attractive location” for hotel investors and developers to consider.
The report stated that Edinburgh remains an “unparalleled” investment opportunity due to its tourism industry, “world-famous” events such as the Edinburgh Festival Fringe, and a steady influx of international visitors, resulting in a sustained occupancy demand throughout the year.
While Edinburgh leads the pack, Glasgow also made significant gains, climbing four places in the rankings.
The city’s hospitality sector has benefited from a combination of solid occupancy rates and increasing ADR, with RevPAR increasing almost 9% in 2024.
Backed by strong event-driven tourism, corporate demand, and relatively low construction costs, Glasgow is becoming an “increasingly attractive” high-growth market for hotel investors outside London, according to the report.
Additionally, Inverness has also emerged as one of the UK’s rising hotel markets, showing double-digit (10%) RevPAR growth over the past year.
As the gateway to the Scottish Highlands, the city is experiencing a surge in demand driven by nature-based and experiential tourism.
With a limited hotel development pipeline, Colliers stated that occupancy remains strong, and investors are beginning to take note of its potential for boutique and luxury hospitality offerings.
Marc Finney, head of Hotels and Resorts Consulting at Colliers, said: “Edinburgh’s hotel market continues to demonstrate remarkable resilience and investment appeal. The city’s ability to drive premium rates, coupled with its year-round demand from both leisure and corporate travellers, makes it a great destination. With a constrained development pipeline currently, this would be an ideal location for investors to consider.”
Cory Latge, hotels analyst at Colliers, added: “With Edinburgh leading the UK and Glasgow and Inverness climbing the ranks, Scotland is proving to be an investment powerhouse in the hotel industry. Whether in the capital’s high-performing luxury market, Glasgow’s growing corporate and leisure demand, or Inverness’s rising star appeal, the country offers opportunities for hotel investors.”
