The importance of major cultural events to the Scottish hotel industry has been underlined by a new report, which raises the prospect of the summer months ending on a high for hoteliers.

Scotland’s hotels enjoyed another strong month in July, as better weather and summer holidays boosted occupancy and profitability, according to the RSM Hotels Tracker.

The data, which is compiled and produced by Hotstats and analysed by accountancy giant RSM UK, found hotel occupancy in Scotland exceeded wider UK levels in July. Scottish occupancy surged to 85.7% from 82.1% year-on-year, compared with 84.8% for the UK as a whole.

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However, despite increased demand, average daily room rates for occupied rooms stayed flat in Scotland and across the UK, at £170.30 and £172.79, respectively.

Revenue per available room in Scotland increased to £145.95 from £123.92 year-on-year, in line with UK trends for the same period. And gross operating profit at Scottish hotels rose to 45.2% from 42.4%, taking it above pre-pandemic levels.

“Scotland’s hotels reaped the rewards of another strong month in July, surpassing the UK’s occupancy levels for the same period, while profitability also grew year-on-year,” said Claire Monaghan, partner in RSM UK’s Edinburgh office. “Although average daily rates didn’t see their usual uptick in July, this is likely due to stronger than normal growth in June, boosted by Taylor Swift’s Eras Tour at Murrayfield Stadium.

"With the Edinburgh Fringe Festival returning in August and demand expected to tick up again, hoteliers are likely to end the summer on a high – exceeding industry expectations at the start of the year. This highlights the significance of music and cultural events in Scotland and their impact on the leisure, hospitality and hotel industry.”

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Ms Monaghan offered her thoughts, too, on the likely impact on the hotel industry of the Oasis reunion tour, which will see the Manchester band play three nights at Murrayfield Stadium in Edinburgh next August- slap bang in the middle of the Edinburgh Fringe Festival.

She said hoteliers will face the “challenge of meeting consumer demand during an already exceptionally busy month”.

“Many businesses are also concerned the City of Edinburgh Council’s incoming tourist tax will add further cost pressures, and make Edinburgh less competitive compared to other UK and European destinations,” Ms Monaghan added.

“However, this convergence of high-profile events and tax changes also presents an opportunity for the capital to innovate and enhance its hotel offering, fund improvements in local infrastructure and tourism, and generate higher occupancy and revenues across Scotland.”

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Thomas Pugh, economist at RSM UK, said the performance of hotels in Scotland in July offered an “additional sign that consumer spending is starting to pick up”.

Mr Pugh noted: “A run of real wage increases, tax cuts by the previous government and now lower interest rates have all helped to boost households’ disposable income. What’s more, consumer confidence continues to improve, which seems to be helping to boost spending on hospitality services.

“A sharp drop in accommodation services inflation was the reason behind the significant slowdown in services inflation last month, but demand for hospitality services clearly remains strong and suggests that services inflation may rebound slightly in August.

“A rise in services inflation in August will provide the Bank of England with a good excuse not to cut interest rates again in September – we think the next opportunity for a rate cut will be in November.”