In publishing the results of its latest hotel tracker, based on data collected by Hotstats, accounting firm RSM UK signaled reasons for cautious optimism about the prospects for the Scottish hotel sector in the second half of the year, noting that consumers still seemed Prioritize experiences over goods.
The general occupancy rate of hotels in Scotland it went from 65.4% in March to 70% in April. The occupancy rate increased from 68.7% to 71.2% between these two months across the UK.
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Average daily occupied room rates increased from £101.90 in March to £117.27 in April in Scotland, and from £135.69 to £142.73 in the UK overall. Room rates rose 10% in Scotland and 16% across the UK compared to the same month last year, the tracker shows.
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Revenue per available room (revpar) increased from £66.70 in March to £82.11 in April in Scotland and rose from £93.23 to £101.57 across the UK. The hotel sector’s gross operating profit margin increased from 19.8% to 24.8% in Scotland last month, while it fell from 31.9% to 31.4% across the UK.
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Thomas Pugh, economist at RSM UK, said: “Falling inflation, falling energy prices and a tight labor market mean that real consumer earnings should start to rise again in the third quarter, which will support the claim.” Additionally, consumers still seem to prioritize experiences over goods, which should further support demand for hotels.
“However, concerns about sticky inflation mean interest rates are likely to rise to 5%, or even slightly higher, raising the risk of the UK going into recession later this year or early. of 2024. That, of course, would offset any benefit from falling inflation on consumer spending. There are reasons to be optimistic about the second half of this year, but only cautiously.”
Stuart McCallum, Partner and Head of Consumer Affairs markets in Scotland at RSM UK, said: ‘Visitors to key locations in Scotland are helping to improve the performance of the hospitality industry. It looks like this will continue with the start of summer.”
He added: “Hotels are still dealing with rising costs and skyrocketing inflation, but it’s encouraging to see demand pick up, meaning hoteliers can book rooms without deep discounts. This is also having a positive impact on the bottom line, which will be a welcome turnaround for the sector as companies start to rebuild their balance sheets. While there is reason for optimism as consumers choose to spend on outings and entertainment, hoteliers need to be flexible and agile. With another interest rate hike on the horizon, the rest of the year will be far from plain sailing.”