Scotland is the clear outperformer among the four nations as RevPAR grew by approximately 12% year over year, according to half-year results from CoStar. Occupancy and rates have achieved the biggest increases, too, with Edinburgh hotels being one of the top performers. However, it is not only hotels in the capital city that have been successful, with hotels in most submarkets experiencing double-digit revenue growth, supported by international travel, an increase in golf business and major events, including Taylor Swift’s Eras Tour. According to data from the ONS, Scotland showed the strongest recovery in overseas visitors in 2023 compared to 2019, with visits up 15% while spend was up 41%, further supporting business for Scottish hotels.
Conversely, Wales has been an underperformer and also seeing the weakest recovery in tourism, especially from an international perspective, where visits remained 11% below 2019 levels, according to the ONS’s International Passenger Survey. Year-to-June, hoteliers have lost some pricing power, too, with rates declining while occupancy was stable. Weekend business has been the most negatively impacted over the first half of the year, suggesting that consumers may be cutting back on costs, translating into more competitive pricing, particularly during slower trading periods.
As the summer begins, however, business on the books as of the 8th of July suggests a more positive outlook for the upcoming months. Staycations to the wider region and major concerts in Cardiff are expected to boost business. Billy Joel’s concert at the beginning of August is expected to have a major impact, with hotels already at capacity, according to STR’s ForwardSTAR data.
Events have also enabled hoteliers in Northern Ireland to capitalise on the boost in demand. Bruce Springsteen’s sold-out concert in Belfast at the beginning of May contributed to prices soaring. Meanwhile, greater flight capacity may also be supporting demand growth in Northern Ireland, with Belfast International Airport reporting a 30% increase in passenger numbers during the first quarter compared to 2023.
Robust demand from the Republic of Ireland has also enabled hoteliers to drive pricing in Northern Ireland as overnight stays from the neighbouring country grew by 45% in 2023, significantly surpassing levels seen pre-pandemic. This trend is likely to continue as Northern Ireland is perceived as being more value-for-money for Irish consumers, according to Tourism Northern Ireland research on consumer sentiment.
Finally, hotels in England have experienced more moderate revenue growth, although still in positive territory. Given England’s higher share of rooms, totalling nearly 570,000, the nation’s hotel performance has a greater influence on the overall UK results. Room demand over the first half of 2024 points to stable performance growth, with hoteliers managing to grow average room rates in line with inflation at approximately 2%. Half-year results further underline normalised trading patterns, with midweek trade underpinning revenue growth.