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Scotland is ranked eight out of 13 European countries for ROI on leased hotels

23 September 2013 by
Scotland is ranked eight out of 13 European countries for ROI on leased hotels

Return on investment for leased hotels ranks Scotland eighth out of 13 compared with other European countries, according to a new report from Scottish Development International and IPD.

It highlights that Scottish hotels produced total returns of 4.8%, year on year, during 2012 compared with 5.1% for the rest of the UK and 5.8% throughout Europe. Across three years, Scottish hotels returned 7.8% year-on-year, outperforming Austria, Finland, Germany, Norway and Portugal.

Graeme White, international sector head of tourism at Scottish Development International, said: "The Scottish leased hotel market continues to generate competitive returns compared to other European countries and other classes of real estate. When we consider the UK all real estate classes returns figure of 3.4% year on year, Scotland continues to outperform this return.

"Hotel leases have not historically been viewed as serious property assets before now, primarily due to a lack of evidence on returns. However, this latest report is tracking actual investor returns on a lease over time, and provides a vital tool in helping investors make informed location decisions."

Meanwhile, revenue per available room (revpar) in Scotland was headed by Aberdeen which, according to HotStats, achieved the second highest performance in the UK after London with an year-on-year increase during 2012 of 13.7%. Occupancy rates, as highlighted by STR Global, also increased to 77.4% from 72.7% the previous year.

Meanwhile Edinburgh suffered a setback from disruption in travel patterns caused by the London 2012 Olympics, with occupancy rates down from 80% in 2011 to9 77.3% in 2012 and a corresponding fall in revpar from £63 to £60.50. While Glasgow's occupancy of 75.8% and revpar at £45 during 2012 was lower than Aberdeen and Edinburgh, it is expected that these figures will be boosted by the availability of Business Premises Renovation Allowances for the renovation of vacant buildings in disadvantaged area and the hosting of the Commonwealth Games in 2014.

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