Scotland’s hotel sector has been encouraged to use current trading performance to reinvest in property quality and guest experience in order to support long-term sustainability and growth.
The message emerged during a webinar hosted by HotelPartner Revenue Management and the Scottish Tourism Alliance, where industry leaders discussed current market conditions, visitor trends and future opportunities for the country’s hospitality sector.
While speakers reported continued strength in international demand, concerns remain about pressures affecting the domestic travel market.
Marc Crothall MBE, Chief Executive of the Scottish Tourism Alliance, said: “The American inbound tour groups are holding up and being a cooler destination means that we are drawing people because of the climate. The challenge for business is how to convert to margin to reinvest and improve the offer. The domestic family market is seeing a squeeze, but 31% of the visitor spend is luxury and that includes the younger generation looking for luxury breaks.
“There’s definitely a degree of anxiousness; it’s not seeing the demand from the domestic audience that we would have hoped for given the issues with jet fuel and the Middle East. The mood music is positive, but we need to make enough hay in the summer to allow businesses to invest in the dark season. There’s lots to play for, but margin is challenging.”
Performance data shared during the webinar highlighted resilience across Scotland’s major cities despite ongoing supply growth.
Aoife Roche, Vice President of Sales, EMEA at STR, said Edinburgh’s hotel market continues to perform strongly despite increasing room supply.
“In Edinburgh, revpar is up 5.7%; this is a story of resilience amid expansion, the city has seen growth in supply, but demand is growing at the same pace, so that is allowing for strong ADR growth.”
However, she cautioned that hotels may face increased competition as new developments are completed.
Roche also highlighted strong performance in Glasgow, where demand growth has outpaced new supply.
“Glasgow looks like it’s going to continue its solid path of growth in the summer months and is about to break the £100 ADR ceiling with an 82% occupancy.”
Former House of Gods COO Ian Stokes said operators should focus on retaining domestic customers during the quieter autumn and winter months.
“My feeling is that the summer is going to be OK, but we need to think about October, November and December, about how to attract the domestic visitor. A lot of that is about nurturing the customer with the CRM; as a nation we expect value and if you’re putting marketing money anywhere, feed it into your CRM.”
The panel also discussed the growing influence of artificial intelligence on travel planning and hotel marketing.
Robert Holland, Managing Director UK & Ireland at HotelPartner Revenue Management, said: “Forty per cent of journeys now start with AI and we have to make sure we’re optimised for AI”.
Stokes added that hospitality businesses should understand how AI platforms source and present information about their properties, particularly as travellers increasingly use AI-powered tools during the booking journey.
VisitScotland’s Director of Strategy & Competitive Intelligence, Cat Leaver, highlighted Scotland’s continued international appeal and the potential impact of major sporting events.
“Growth is increasingly being driven by international markets, while domestic travel remains fragile but vital for sustaining year-round demand.
“Despite a challenging environment, Scotland continues to benefit from strong global appeal, expanding international connectivity, a diverse regional offering and a strong pipeline of major and mega events.”
Looking ahead, industry leaders expressed confidence in Scotland’s long-term prospects, while emphasising the importance of continued investment, quality improvements and strategic planning to ensure the country remains competitive on the international stage.
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