JUST yards from The Herald office in Glasgow, a hotel is being built.

It is just one in what seems to be an endless procession of developments in a city with a thirst for new hotels which shows no sign of being slaked.

I have been thinking about this ever since reporting on comments made by Nicola Taylor, chief executive of Glasgow hotel firm Chardon Management, in The Herald earlier this month.

Ms Taylor, whose family firm owns six Holiday Inn hotels across Glasgow, Edinburgh, Perth and Dunfermline, believes the scale of hotel development in Chardon’s home town in recent years means it has become extremely difficult for operators to compete. Noting that Chardon has “never seen such over-supply” in the six decades it has been trading, Ms Taylor stated that, with yet more hotels coming on stream this year, “it makes for a future that can only be described as challenging”.

There is certainly no doubt Glasgow and indeed Edinburgh have seen a boom in hotel construction in recent years.

READ MORE: Hospitality chief voices fears over number of new hotels in Glasgow

A quick search through cuttings of The Herald in the past six months will throw up many stories about further hotels planned for Glasgow, over and above the 22 which were in the planning system as of May, and indeed the 1,050 rooms added to the city over 2017 and 2018.

Mosaic, the Glasgow-based architect, is involved in proposals to develop hotels in the former C&A building on Sauchiehall Street (on behalf of Qtel) and on the former Glasgow Garden Festival site (a Holiday Inn for Pacific Quay Developments).

Artisan Real Estate is looking at plans for a four-star hotel after acquiring the former Santander building on St Vincent Street, which comes in addition to its projects to build hotels at Customs House on the Clyde waterfront and near Waverley Station in Edinburgh.

Meanwhile, Northern Ireland-based construction firm McAleer & Rushe is making rapid progress on the aforementioned development next to The Herald. It will be the first Maldron Hotel in Scotland from Ireland’s Dalata group.

READ MORE: Hotel plan revealed for Glasgow’s C&A building

These are just a few examples of projects that will add even more stock to Glasgow’s increasingly busy hotel scene.

While the expansion may concern Ms Taylor and other established operators, there are clearly strong economic forces that are making all the investment stack up.

The opening of live music venue The SSE Hydro is widely regarded to have had a huge impact on attracting people to Glasgow.

With the venue quickly proving its ability to attract major stars – Sir Paul McCartney, Fleetwood Mac, The Who, Kylie Minogue , Jean-Michel Jarre and Liam Gallagher are among the stellar names who have graced its stage since its launch in 2014 – The Hydro has created a huge demand for hotel rooms in the city, attracting music lovers from all around the UK and beyond.

The Hydro put an already bustling music scene in Glasgow into overdrive. But concerts are only part of Glasgow’s wider success in attracting major events and conferences.

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That Glasgow was able to win the honour of hosting the UN climate change conference COP26, which takes place this November, only underlined its global status as an events destination, which has no doubt been made possible by the volume and quality of hotel-room stock it now has to offer. There was a time, in fact, when the lack of rooms undermined the city’s attempts to attract the biggest events on the world stage.

Investors, both in the UK and overseas, are alive to the strength of the market and the return on capital hotels offer.

And so the cash continues to flow into further development in the city, providing a welcome economic impact during construction periods and jobs when the hotels are eventually up and running.

For the time being at least, rates of occupancy in Glasgow continue to hold up strongly. According to the latest hotels forecast from accountancy giant PricewaterhouseCoopers, occupancy in Glasgow was 75.6 per cent in the year to June 2019, although this was down from 79.1% for the prior 12 months.

One finding that does give grist to Ms Taylor’s mill was the report’s conclusion that the surge in the number of new hotel rooms across Glasgow and Edinburgh did lead to a fall in revenue per available room (revpar).

PwC, which last year forecast that 1,655 additional rooms would come on stream in Glasgow between 2019 and 2020, found revpar for city hotels dipped to £52.57 from £57.49.

A similar trend was noted for Edinburgh, where 2,400 additional rooms were projected for 2019 and 2020, with revpar sliding to £71.52 from £73.21.

Both cities also saw a fall in average room price, in Glasgow’s case to £69.52 from £72.71and in Edinburgh to £91.63 from £93.47, over the period covered by the survey.

On the basis of those trends, there certainly appears to be credibility to the assertion from Ms Taylor that, while Glasgow’s success in attracting events is good for general hotel occupancy, the increasing supply of rooms is driving down the rates operators are able to command.

Carrying on that line of argument, it could then be said that lower room rates lessen the amount of cash left over for hoteliers to invest in and maintain their properties.

It is also worth noting that, from the perspective of hotel owners, this intense competition comes as the cost of doing business has never been so high.

As prominent figures such as Marc Crothall of the Scottish Tourism Alliance and Stephen Leckie of the Crieff Hydro group have persistently highlighted in recent months, margins in the tourism and hospitality industries are coming under intense pressure from rising labour costs, high business rates and a level of valued-added tax that is considerably higher than that faced by their counterparts on the European mainland.

They also repeatedly highlight the cost of bureaucracy in the shape of the apprenticeship levy, and have major concerns about the prospect of local councils introducing tourist taxes, not to mention the intense competition provided by the likes of Airbnb (though hoteliers have given a cautious welcome to proposals to introduce a licensing scheme for short-let operators).

For the time being, though, these costs do not appear to be hindering the appetite for new hotels in Glasgow, and the building work continues apace as I look out from the office here at The Herald.