According to Savills, Scotland saw hotel transaction volumes (sales of £1 million +) reach £431 million in 2024, up 38% on 2023 and considerably higher than the 10-year average of £282 million. Overall, Scotland accounted for circa 7.50% of all UK hotel deals last year, the highest total outside of London.
Savills notes that Edinburgh hotel deals made up £251 million, representing 58% of the Scottish total with key deals including Pandox buying the DoubleTree Hilton in Edinburgh city centre for £49 million and Millemont purchasing the Yotel in Edinburgh both from Starwood. Elsewhere, in Glasgow Swiss Life bought the Maldron Hotel for £33 million.
In terms of buyer profile, Savills figures show that 40% of purchases in 2024 were from domestic buyers, a significant decrease on the 77% seen in 2023. This is due to US buyers making large portfolio acquisitions as well as international capital from Sweden and the UAE. The overseas uplift has been attributed to sustained revenue per available room (RevPAR) in recent years.
Looking at the year ahead, Savills anticipates another strong year for the Scottish hotel sector with a number of sale process already underway, including Nuveen Real Estate’s sale of the W Hotel in Edinburgh.
There are also a number of highly anticipated openings and up to 1,500 rooms in development, such as Cheval Maison in Glasgow, the Hoxton and the Jenners Building, both in Edinburgh. Scotland is, therefore, expected to remain one of the highest performing hotel markets outside of London in 2025.
Steven Fyfe, hotel capital markets director at Savills Scotland, said, “Once again, Scotland performed exceptionally well in 2024 and we continue to see year-on-year increases in transaction volumes, reflecting the strong RevPAR growth in key markets. Private equity confidence has been central to this recovery, with significant investments made by Starwood Capital, Blackstone and KKR, among others. This is because the sector remains supported by solid fundamentals, serving as an inflationary hedge and offering continued international appeal.
“In particular, Edinburgh remains a global tourist destination, which we have seen in the higher than average number of single asset sales. It is also uniquely placed to cater for various products including serviced apartments and hostels, making the city especially appealing to investors looking to enter the market. With all this in mind, we expect transaction volumes will continue to outpace the 10-year average in 2025.”
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