Investment in Scottish hotels in 2017 reached £195 million involving 23 deals — a 60% increase on the total investment volume recorded in 2016, according to Savills research.

Edinburgh saw the highest volume of hotel investment, accounting for 64% of Scottish transactions totalling more than £117 million, a 58% increase on 2016 volumes.

Key deals in Scotland included the The Scotsman Hotel in Edinburgh selling to private investors G1 Group and the £33.31 million sale of Premier Inn St Enoch Square in Glasgow.

“The strong activity places Edinburgh ahead of both Birmingham and Liverpool to become the second largest target city outside of London in 2017, in terms of hotel investment volumes, after Manchester,” said Savills.

Investment into Glasgow in 2017 more than doubled – rising from £16.8 million in 2016 to £35.79 million, while both Dundee and Aberdeen saw increased year on year investment volumes, totalling £5.5 million and £5.7 million, respectively.

Overseas investors dominated 2017 transaction volumes in terms of buyer type, totalling £57.4 million – more than seven times larger than the level of investment by international buyers the year before.

US investors took the lion’s share of investment activity, followed by investors from Singapore, India and Hong Kong.

Steven Fyfe, associate in the hotels team at Savills Scotland, said: “2017 marked a year whereby the operational and investor sentiment of hotels were both at strong points in the cycle.

“The momentum has continued and Q1 2018 looks set to deliver in excess of £110 million in transactions in a period that is usually notoriously quiet.

“The improved performance is expected to offset the 9% increase in supply anticipated throughout 2018.”