Savills recorded 31 Scottish transactions in 2023, most notably the sale of the Waldorf Astoria in Edinburgh for £85 million to Henderson Park and Klarent Hospitality, reflecting 27% of overall volumes.

Other key deals saw the sale of Mar Hall by EY Parthenon to Dubai based Dutco, which was marketed at a guide price of £12 million.

In terms of buyer profile, Savills noted that 77% of purchasers were UK investors, an increase on the 63% seen in 2022.

“Often these buyers appreciate the nuances of sub-markets and understand where they can add value and make a positive impact to existing hotels and their communities,” said Savills.

“The additional 23% of capital came from locations including South Africa, UAE, Singapore and the Republic of Ireland.

“Looking at the year ahead, Savills believes confidence will continue to return to the market with a number of sale processes already underway.

“What’s more, there are a number of highly anticipated openings and up to 678 rooms in development, including Red Carnation at 100 Princes Street and the Hoxton, both in Edinburgh.

“The city is, therefore, expected to remain the highest performing hotel market outside of London in 2024.”

Steven Fyfe, hotel capital markets director at Savills Scotland, said: “While 2023 was challenging, we saw 72% of all transactions take place in the second half of the year, demonstrating the enduring appeal of Scottish hotels despite a difficult market.

“We are already seeing stability return with a strong start to 2024.

“Key events this year, including the Six Nations, Taylor Swift playing three dates at Murrayfield in June and the growing number of people attending the Fringe and summer festivals will no doubt see visitor numbers rise.

“With all this in mind, from an investment perspective, we should see transaction volumes exceed £200 million by the end of the year.”