Edinburgh hotel room rates soar 18.9%

Edinburgh hotels sold 80.8% of their rooms during November, a slight rise on the same month of 2015, and grew their average room rate (ARR) from £84.75 in November 2015 to £100.76, an increase of 18.9%.

The monthly LJ Forecaster Scottish Intercity Report from tourism market research firm LJ Research also showed that forward bookings for each of the next six months in Edinburgh are all above last year’s levels.

Sean Morgan, managing director at LJ Research said: “November was the seventh consecutive month of £100+ average room rates for city centre hotels in Edinburgh.

“The fact that these prices did not negatively impact on room occupancy are signs of a very healthy accommodation market indeed.

“The growth observed in Edinburgh’s hotel industry is perhaps even more astonishing when considering that 800 new hotel rooms have opened in the city so far in 2016 and also factoring in the growth of the sharing economy.

“For the latter aspect, our ongoing Edinburgh Visitor Survey continues to record growing usage of Airbnb — since July this year some 8% of Edinburgh visitors stayed in lettings marketed by Airbnb.

“This compares to only 5% in the same period last year and indicates that the sharing economy is attracting more visitors to the city.

“Without Airbnb, hotels’ room rates and occupancy would potentially be higher still.”

The report showed that Glasgow and Aberdeen hotels also welcomed more guests in November compared to last year — but the overall picture in those cities was mixed.

In Glasgow, November’s occupancy rate at 87.5% was 1.1 percentage points higher than last year.

But the average room rate was £74.46 for Glasgow city centre, 1.6% less than in November 2015.

In Aberdeen, occupancy grew 1.5% to 70.0% but November’s average room rate was only £65.38 compared to £76.55 last year — a drop of 14.6%.

Alistair Dickson, partner at accounting network RSM, said: “Hotels in Edinburgh and to an extent, Glasgow, appear to have been enjoying post-Brexit life.

“The shot in the arm provided by low exchange rates has given international tourism a boost and, if the Scottish government is successful in negotiating a cut to air passenger duty, this could continue in the mid-term.

“Aberdeen’s hotel industry is more dependent on oil revenues than exchange rates and air passenger duty.

“This is reflected in the 70% occupancy rates and circa £65 room rates, far removed from the dizzying heights of £300 room rates of yester-year.

“Better times will come however, and recent rises in oil prices following the OPEC agreement to cut production, opening the Western Peripheral route and a regenerated town centre all signal optimism in the market.

“Clever cash flow and financial management will help those impacted until the market uplift is realised.”

John Donnelly, chief executive at Marketing Edinburgh said: “Along with being recognised as one of the world’s most beautiful and culturally inspiring cities, Edinburgh’s solid reputation as a hub for business and innovation makes it equally appealing to our business and leisure visitors.

“Between 2010 and 2015 the number of visits to the city has increased by 18%, a huge reason why the city has been able to maintain its high occupancy rates and grow RevPAR.

“Edinburgh is on target to grow the number of visits to the city by one third by 2020.

“Increasing visitor numbers in the quieter shoulder months is critical in Edinburgh achieving its visitor figure objectives.

“It’s therefore very encouraging to see this year on year increase in November’s accommodation figures, a traditionally quieter time of year for the city, just ahead of the popular Christmas and Hogmanay celebrations in December.”