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Edinburgh Edinburgh

Edinburgh Hotel Market Spotlight

28/05/2024

Edinburgh’s hotel sector outperformed the UK national average in revenue growth

Edinburgh Hotel Market Overview 

Despite an ongoing supply increase (+3.7%) during the first 3 months of 2024, well ahead of the national average, the Edinburgh hotel market benefits from healthy performance improvements.

In Q1 2024, GOP per available room (PAR) in the sample of full-service branded hotels increased by almost 69% compared to Q1 2023. As a result, the profit margin has increased from 20% in Q1 2023 to 27% in Q1 2024. The profit margin on a 12-month basis reached 42.2% (£97 PAR/day).

Strong revenue growth (+22% vs Q1 2023), surpassing expenses (+10%), was the key driver of improved profitability. 

Utilities Costs

Following the major increase in energy costs in 2022 and 2023, prices started to moderate across the UK. Accordingly, hotels in the Edinburgh sample witnessed an 11% decrease in utility costs in Q1 2024 compared to Q1 2023.

Payroll Costs

Total payroll costs have risen by about 11%, whereas Sales & Marketing labor costs have experienced the highest increase (+16%) followed by an increase in Property & Maintenance (+13%) and F&B department costs (+12%). Part of this increase is attributed to the rise in the National Living Wage in April 2023 and mounting pressure to retain staff as the rising living costs prevail. This is likely to continue going forward.

Other Expenses 

Other expenses grew by £5.9 PAR up to 19%, well above the overall CPI growth over the same period. The main contributors to this expense escalation were Administrative & General (+28%) and Sales & Marketing expenses (12%).

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Lise Keller
Lise Keller

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Prague, Czechia


+41 (78) 8764114

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Ed Fitch

Partner
London, United Kingdom


+44 (20) 71525850

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Carl Ridgley

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London, United Kingdom


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Richard Candey - London
Richard Candey

Partner
London, United Kingdom


+44 207 152 5468

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Murray Strang
Murray Strang

Managing Partner, Scotland
Edinburgh, United Kingdom


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