Despite Brexit uncertainty, tourism and hotels have defied conditions to deliver significant growth in Scotland.
GVA’s inaugural Hotels Economic and Property Market Review has highlighted strong hotel market performance across the UK in 2017. In Scotland, buoyed primarily by inbound tourism.
VisitScotland statistics show that the number of international tourist trips to Scotland in the first nine months of 2017 increased by 14.6% (to 1.26m) over the same period of 2016. This offset a drop in domestic overnight trips over the same period, which fell by 5.5% to 8.29m.
This data highlights both the work of VisitScotland in marketing the destination in recent years, with North Coast 500 being the latest addition to the inventory, but also shows the benefits of Sterling devaluation following the 2016 referendum. Spending by overseas tourists has increased at an even faster rate, rising by 18.3% to £1.85bn from January to September 2017.
The boom in inbound tourism is further evidenced by the two main international airports in Scotland both declaring 2017 to be a record year for passenger numbers. Glasgow recorded 9.9m passengers, an increase of 5.8% over 2016. Edinburgh boasted 8.6%, a rise of 13.4m, bolstered by a 13.8% growth in international passengers to 8.15m largely thanks to the addition of 32 new routes.
On the back of this strong performance, hotel investment transactions in Scotland exceeded £240m in 2017, rising 69% against £142m in 2016. Much of the investment in the sector is from overseas markets taking advantage of the exchange rate, with Middle East and Far Eastern buyers in the ascendancy.
Andrew Renouf, director of retail, hotels and leisure for GVA in Scotland, said: “The hotel sector across Scotland has benefitted in 2017 from the continued weakness of Sterling in currency markets, coupled with the very high profile of destination Scotland around the world. Further expansion of both Glasgow and Edinburgh Airports will continue to open up new markets, with a direct route to China high on the agenda.
“We have seen high levels of investment and development appetite in key locations as a result of this, and hope that the fundamental market strengths outweigh any impacts of a slowing of the economy highlighted in the latest Scottish Government State of the Economy report.”