Scotland’s hotels outpace rest of UK but summer getaway will provide real test

Scotland’s hoteliers enjoyed a solid spring thanks to decent weather and a series of bank holidays but ongoing cost pressures “mark a challenging road ahead”, a new study has revealed.

RSM UK’s latest hotel tracker shows that Scottish hotel occupancy rose from an average of 82.8 per cent in May 2025 to 83.7 per cent this May. The result was better than the UK-wide average, which nudged up from 79.4 per cent to 79.7 per cent.

Meanwhile, gross operating profits in Scotland rose in May from 42.2 per cent in 2025 to 43.7 per cent, with overall UK profits increasing only marginally, from 36.7 per cent to 36.8 per cent in the same period.

Edinburgh hoteliers will be hoping for a boost this August as the annual festivals, including the Fringe, come to town.

The data, which is compiled and produced by Hotstats and analysed by the audit, tax and consulting firm, also reveals that average daily rates of occupied rooms in Scotland rose from £156.44 to £172.09 in May, year on year. That compares with a UK increase from £150.82 to £156.72.

Revenue per available room, or RevPAR, which is seen as a key industry measure, rose from £129.49 to £144.02 in Scotland, and from £119.74 to £124.84 UK-wide.

Katie Morrison, partner and head of consumer markets at RSM in Scotland, said: “The combination of warm weather and public holidays in May provided a welcome boost to hotels across the UK, with Scotland showing particular strength as a tourist destination. The real test though will be seeing whether the Scottish hotel sector can maintain its trajectory of growth throughout the summer months as economic pressures persist.

“Luxury hotels remain a key driver behind Scotland’s success, amid a growing trend towards shorter but more high-end breaks. However, as overall average daily rates for occupied rooms continue to rise, hoteliers in the region face a careful balancing act between maximising profit growth and remaining an attractive holiday destination.”

She added: “Even with the price of oil dropping, there remains much uncertainty about how and when this will reduce the energy cost burden faced by the hotel sector. Paired with additional cost increases due to changes to national insurance and minimum wage, Scottish hotels may face further pressure to hike room rates to absorb additional costs, especially during periods of high demand, such as the Edinburgh Festival Fringe.

“This increases the risk of hotel prices in the region reaching a tipping point, where higher rates begin to subdue demand.”

Thomas Pugh, chief economist at RSM UK, said: “Even with the recent drop in oil prices, the latter half of the year continues to look tough for consumers, with real household disposable incomes set to all but stagnate this year as the weaker labour market weighs on pay growth.

“The good news is that consumer confidence is holding up slightly better than expected so far and households are saving a large portion of their incomes, which means there’s scope to offset the impact of weaker real income growth on spending by saving a bit less.”