For a comprehensive review of the Europe market, click below:
HVS In-Depth Europe Hotel Valuation Index:
2023
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2021
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2020
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2001
Edinburgh, with 548,000 inhabitants as of 2022, ranks ahead of Milan, Prague, Budapest and Lisbon in the Global Financial Centres Index (GFCI, 2022). While the largest private sector in Edinburgh is financial services, employing 35,000 workers and managing over £500 billion of funds, the city also enjoys a good reputation for fintech services, IT and web-based marketing. The city is home to a thriving technology and software sector, including global companies founded in Edinburgh, such as Skyscanner and Fanduel. Key infrastructure includes the state-of-the-art Edinburgh International Conference Centre and Edinburgh Airport.
The biggest leisure demand driver in the city is the Edinburgh Festival Fringe. The festival’s events normally push 100.0% hotel occupancy for a six-week period every year. This, and other events such as Hogmanay (New Year’s Eve) and a strong summer season, have historically contributed to year-long average occupancy of over 80.0% for the last decade and beyond. Average rate growth stagnated in 2018 after seven consecutive years of growth from 2011 to 2017, and further declined by 1.5% in 2019; however, the city still enjoyed one of the highest citywide RevPARs in Europe. In 2020, Edinburgh tourist demand contracted significantly due to the pandemic. In 2021, an uptick in volume followed the relaxation of COVID-19 measures across the UK in May. Over the summer months of 2021, Edinburgh recorded occupancy levels north of 60.0%, which led to citywide RevPAR growth of more than 150.0% over 2020. In 2022, Edinburgh’s hotel market performance continued to grow, experiencing a 60.0% increase in marketwide occupancy and a 25.0% rise in average rate, which resulted in RevPAR returning to pre-pandemic levels, with a 2.0% increase in real terms.
Edinburgh has an extensive hotel pipeline represented by 61 projects that are expected to bring around 4,980 rooms to the city’s hotel market (around 18.0% of the current supply) with most of the planned hotels being independent. The most notable branded hotels in the pipeline are the 131-room NYX Hotel Edinburgh by Leonardo Hotels, which is currently under construction and is expected to open in August 2024, as well as the 285-room Hyatt Regency Edinburgh Marina Hotel, which is in the final planning phase and is set to open in December 2024.
In 2022, Edinburgh saw a continued increase in hotel transactional activity compared to 2021. The most notable hotel transactions included the 115-room Travelodge Cameron Toll for €11.7 million (€102,000 per room), as well as the Point A Portfolio, which consisted of 10 properties with a total of 1,493 rooms, of which one property is in Edinburgh, for an undisclosed amount.
Overall, our 2023 European Hotel Valuation Index indicates a value increase of 5.0% (around 4.2% in pounds sterling) per key in Edinburgh in 2022 compared to 2021.
The widespread impact of the coronavirus (COVID-19) has had an unprecedented impact on hotels and hotel values worldwide.
Consequently, the latest HVI analysis may no longer reflect the most current measure of lodging industry strength or the
hospitality investment market.
In each of our offices across the globe, we are working tirelessly to analyze the impact of recent events and provide timely
insights to help you navigate these uncharted waters. Because it is unclear how long the pandemic will last or how long related
restrictions will be in place, we are updating our analyses on a weekly basis using the most current data.
Additionally, examination of value trends in prior cycles can provide useful information. Historical patterns, together with
an understanding of the market’s current expectations for the eventual recovery of the industry and its performance, can provide
insights on the likely trajectory of decline and recovery for hotel values.
For the Latest Information and Analysis on the Impact of COVID-19Click Here
If you’d like to speak to someone personally to review details of our most current analysis, please don’t hesitate to contact
us directly.
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