Good news from the Highlands
In Scotland, the UK and the rest of Europe, 2013 represented a year of improving economic conditions with a return to sustained economic growth for the UK and significant improvements in the peripheral European economies. On the very day of the referendum on Scottish Independence (a pure coincidence or serendipity?) Scottish Enterprise produced some very succinct facts and stats including:
• Scottish hotels produced a total return of 9.2% year-on-year in 2013. This reflects an almost doubling of performance from 2012 when a return of 4.8% y/y was recorded;
• The strong Scottish hotel performance followed a broadly improving European trend through 2013, when the rest of UK hotels returned 11.4% y/y, up from 5.2% in 2012 and Pan-European hotels returned 6.6% y/y (in local currency) up from 5.8% y/y;
• Income return for Scottish hotels, at 6.3% y/y drove performance, while capital values returned to growth, up 2.7% y/y for the year, having fallen back by 1.2% y/y in 2012;
• Compared to the rest of Europe, total returns from Scottish hotels ranked the market as the second best market out of the thirteen countries in the sample;
• On a three-year basis, Scottish hotels returned 7.8% y/y, outperforming Austria, Finland, Germany, Norway and Portugal.
Speakers at the packed event included Mitchell Gaglardi of the Sandman Hotel Group, Colm Lauder of MSCI/IPD (formally known as Investment Property Databank) and Sean Morgan, MD of LJ Research. Sandman has two operating hotels in England with one under construction in Aberdeen Scotland and Gaglardi cited how easy it was to do business in Scotland with assistance from Scottish Enterprise.
Lauder noted that “investors are focussing on hotels due to diverse income streams and that Scottish hotels comprise 9% of the UK total sample” and that “Scotland and the UK outperformed their European peers and that the resilience of the UK Market is comforting investors v’s significant declines in Europe”.
Morgan of LJ Research reported on performance stats and that occupancy % in Scotland in 2013 was up 3.4% v’s 2012 and YTD 2014 is +2.7% v’s 2013. He noted “Aberdeen has relatively flat occupancy trend due to its status as the Oil & Gas capital of Europe and that Glasgow saw 40% revenue growth for the Commonwealth games while Aberdeen delivered 16 successive quarters of RevPAR growth”.
Glaswegian Shopaholics
Graeme White of Scottish Enterprise noted that Edinburgh needs 3,200 more rooms by 2020 and there are opportunities across the seven cities in Scotland. White also noted that Tripadvisor coined Glasgow as a “shopaholics” paradise and that with nearly 18,500 tourism businesses across Scotland (similar to Republic of Ireland) the growth in international travellers to Scotland is set to continue with Deloitte forecasting that tourism receipts could double by 2023″. Indeed, the strengthening economic indicators and increased stability amongst major trading partners suggest 2014 will be a strong year for Scotland.
