Scotland steals the show with 2013 RevPAR growth

12-Feb-2014 - Last updated on 26-Apr-2021 at 19:44 GMT

Hospitable City: Hotels in the Scottish capital of Edinburgh recorded an average RevPAR rise of 9 per cent in 2013

Hotels in Aberdeen and Edinburgh outstripped the rest of the UK in 2013 with ‘extraordinary’ RevPAR rates in 2013, while those in London, Newcastle and Birmingham lost out.

That’s according to the latest Hotel Bulletin from AM:PM Hotels, HVS and Zolfo Cooper, which analysed last year’s performances of hotels in major cities across the UK. The Bulletin concluded that the market is in a ‘confident mood’ and ‘the outlook for 2014 is good’.

Properties in the 'hotel hotspot' of Aberdeen saw an impressive average RevPAR increase of 19 per cent, driven in part by oil and gas-related demand; while those in the 'Hospitable City' of Edinburgh saw RevPAR rise by an average of 9 per cent over the four quarters.

Add to that recent figures from BDO which revealed record-breaking occupancy levels in fellow Scottish city Glasgow, and it’s fair to conclude that the country’s hotel industry is booming. And that’s ahead of the 2014 Commonwealth Games in Glasgow, which will of course positively affect the city's occupancy rates and should indirectly benefit the other major cities.

Newcastle slump

Meanwhile, the West Yorkshire city of Leeds was described by the Bulletin as one of the ‘surprise performers’ of 2013, with RevPAR increasing by an average of 9 per cent in 2013 due to conference-related demand and a relatively low level of new supply.

At the bottom of the 2013 RevPAR table was Newcastle, with a decrease of 5 per cent – it was the only cities of the 12 reviewed by the Bulletin to record a RevPAR decline. And with active pipeline levels above 11 per cent, the Bulletin indicates that Newcastle’s hoteliers may continue to struggle this year.

London RevPAR increased by an average of 1 per cent for the year which, when considering the other cities reviewed, appears relatively low.

Budget boom

Of the 1,766 hotel bedrooms added in the last quarter of 2013, 78 per cent were in the budget sector, with notable openings including the 171-bedroom QBic Hotel in London City and the 168-apartment Staybridge Birmingham.

With over 14,000 bedrooms in the active pipeline for 2014, the Bulletin expects the budget sector’s big players, Premier Inn and Travelodge, to continue to expand and complete their refurbishment plans, which may impact other hotels in the budget and three-star spaces.

Confidence boost

Analysing the Bulletin’s findings, Graeme Smith, head of hotels at Zolfo Cooper, said: “For the first time since 2007, the UK hotel market appears to be in confident mood. 2013 marked the return of the UK regions both in terms of trading and transactions, reflecting more positive economic sentiment. In the absence of external shocks the outlook for 2014 is good.”

Tim Smith, director at HVS, added: “At last, some good news for the beleaguered hoteliers of the UK. Revenues have been rising for a number of months now and are, at last, starting to outstrip rises in expenses. This in turn is resulting in improved investor appetite and, therefore, values.

“I hope the current poor weather and damage to infrastructure does not de-rail or postpone this recovery.”