Edinburgh’s popularity makes it the new destination of choice for expanding hotel companies


Edinburgh has become the in-place to open a hotel with nearly 1,500 new rooms coming on-stream in the next two years including two properties owned by international hotel chains, according to a new report from hotel consultancy HVS London.

Investors are attracted to Edinburgh by the city’s unique visitor mix which means hotels aren’t totally reliant on international tourists or corporate stays. A large number of visitors to Edinburgh come from within the UK, a fact that has helped the city’s hotels perform better throughout the downturn than hotels in the UK’s other provincial cities.

Following a dip in 2009, occupancy and average room rates in Edinburgh have shown positive growth in 2010 and into 2011 and look set to improve into 2012. Rooms revenue per available room (RevPAR) for the city’s hotels has risen 6.1% in the 12 months to April 2011 (STR Global, 2011).

Over the next three years Edinburgh will see a 13% increase in room supply across all hotel categories including two international hotel chains – Marriott and InterContinental – opening extended stay properties in anticipation of a revival in the corporate sector. Jumeirah, Hyatt and InterContinental are also thought to be looking for sites in Edinburgh.

“International brands with hotels already in the city are adding to their portfolio as well as new entrants, which confirms that investors are seeing the potential for future growth in Edinburgh,” commented report author Lara Sarheim, associate director, HVS London.

New hotels due to open in Edinburgh include a 97-room Premier Inn, a 107-room Marriott Residence Inn and two brands from InterContinental - Hotel Indigo with 60 rooms and Staybridge Suites with 121 rooms. Travelodge will open two further properties and Motel One will open a hotel in Summer 2012. In addition Rezidor Hotel Group will add over 300 rooms to Edinburgh’s hotel supply when two Park Inn by Radisson hotels open in early 2013.

“The city benefits from a mix of leisure and business tourism so hotel performance remains strong all year round,” added Sarheim. “As a result the impact of the economic downturn was less severe in Edinburgh and the city has emerged largely unscathed with occupancy, average rate and RevPAR growing year‐on‐year in 2010 and 2011. Full year occupancy in 2009 and 2010 was the second highest in Europe, beaten only by London.”

Edinburgh is the UK’s most important tourist destination after London, attracting more than 3.5 million visitors a year. The city generates demand from both leisure visitors (approximately 75%, including those visiting friends and relatives) and business travellers (approximately 25%).

Some 60% of visitors to Edinburgh are domestic UK but the airport has shown significant growth in international and domestic numbers over the past 10 years, last year handling over 8.6 million passengers. Numbers will continue to increase as plans for expansion progress.

HVS’s annual Hotel Valuation Index (HVI) places Edinburgh 14th in European cities in terms of hotel value per room. The city ended 2010 with values of around £183,000 per room for a four‐star, city centre property. By 2015, HVS forecasts that values per room in the city will rise to £235,000.


For a complimentary copy of ‘Market Snapshot Edinburgh, UK’ by Lara Sarheim and Lucy Payne click here.

For further information please contact:

Linda Pettit, Tilburstow Media Partners
Tel: 01737 823721
Mob: 07973 789853

Lara Sarheim, Associate Director
Tel: +44 20 7878 7765
Mob: +44 75 1550 3305

Lucy Payne, Market Intelligence Analyst
Tel: +44 20 7878 7757
Mob: +44 78 5020 5149

Russell Kett, Managing Director
Tel: +44 20 7878 7701
Mob: +44 78 0241 1142

About HVS
HVS is the world’s leading consulting and services organisation focused on the hotel, restaurant, shared ownership, gaming and leisure industries. Established in 1980, the company performs more than 2,000 assignments a year for virtually every major industry participant. Through a worldwide network of 30 offices staffed by 300 industry professionals, HVS provides an unparalleled range of complementary services for the hospitality industry. The London office focuses on providing specialist services throughout the EMEA region – Europe, Middle East and Africa. For further information visit www.hvs.com.