Edinburgh’s exceptional occupancy rates (85%), strong Average Daily Rate (ADR) growth (up 10% from 2023), and robust RevPAR performance (up 13% on the previous year) makes a potentially attractive location for hotel investors and developers to consider, according to Colliers.

Edinburgh remains an unparalleled investment opportunity due to its thriving tourism industry, world-famous events such as the Edinburgh Festival Fringe, and a steady influx of international visitors, resulting in a sustained occupancy demand throughout the year.

Marc Finney, head of hotels & resorts consulting at Colliers, said: “Edinburgh’s hotel market continues to demonstrate remarkable resilience and investment appeal. The city’s ability to drive premium rates, coupled with its year-round demand from both leisure and corporate travellers, makes it a great destination. With a constrained development pipeline currently, this would be an ideal location for investors to consider.”

While Edinburgh leads the pack, Glasgow is also making significant gains, climbing four places in the rankings. The city’s hospitality sector has benefited from a combination of solid occupancy rates and increasing ADR, with RevPAR increasing almost nine per cent in 2024. Supported by a vibrant events calendar, strong corporate demand, and relatively favourable build costs, makes it an increasingly attractive market for hotel investors looking for high-growth potential outside of the capital.

Inverness has also emerged as one of the UK’s rising hotel markets, showing double-digit (10%) RevPAR growth over the past year. As the gateway to the Scottish Highlands, the city is experiencing a surge in demand driven by nature-based and experiential tourism. With a limited hotel development pipeline, occupancy remains strong, and investors are beginning to take note of its potential for boutique and luxury hospitality offerings.

Cory Latge, hotels analyst at Colliers, added: “With Edinburgh leading the UK and Glasgow and Inverness climbing the ranks, Scotland is proving to be an investment powerhouse in the hotel industry. Whether in the capital’s high-performing luxury market, Glasgow’s growing corporate and leisure demand, or Inverness’s rising star appeal, the country offers opportunities for hotel investors.”