A property consultancy has published new figures which it says contradicts claims that Edinburgh has too many hotel rooms following a wave of new openings.
The figures come in the wake of claims by the Edinburgh Hotels Association (EHA) that there has been a slump in demand for hotel rooms in the city.
Colliers International said although 2019 saw a “slight decrease” in occupancy to 82% from 82.9% the previous year and the average room price dipped to £101.92 from £103.72, it pointed out total revenue rose to £505.7 million from £474.9 million, as the number of rooms grew to 16,579 from 15,131.
Colliers also said occupancy last year was 1.6% higher than the 80.4% achieved in 2014 and the average room rate had increased by 18%.
The Edinburgh Hotels Association (EHA), which represents more than 50 providers in the capital, said this month that some businesses have been left in a “fragile” state due to the addition of more than 5,000 new rooms over the past 10 years which it said has left hotels unable to fill beds, even during peak periods. It also said the capital had lost its position as the city with highest room rates in the UK outside London.
But Marc Finney, head of hotels & resorts consulting for Colliers said: “There seems to have been an awful lot of talk recently about how the Edinburgh market is over-supplied and how Scotland is a victim of over-tourism.
“While I’m not saying the performance of Edinburgh’s hotel market last year was something to rejoice, it was relatively stable despite the background of economic slowdown related to political turmoil in Westminster and Brexit.
“The fact the Edinburgh market generated £30 million more from hotel accommodation revenue in 2019 compared to 2018, against a negative economic backdrop, is a strong result.”
Finney also said Edinburgh compared well with other capital cities, citing Dublin as an example.
“Dublin has 24,000 rooms – 8,000 or some 50% more than Edinburgh. With a similar occupancy to Edinburgh, at 82%, Dublin is also considered to be under-supplied just now. However, nobody in Dublin is concerned about over-supply and they are actively encouraging tourism. For Edinburgh to match Dublin’s level, we would need to add another 50% new rooms just to stand still.
“The fact is that without the extra rooms built, Edinburgh would have missed-out on £200 million per year of rooms revenue alone – that is before the spend on food and beverage, restaurants, bars, taxis, visitor attractions, shops etc, which would more than double the overall value to the economy. Conservatively, even at 0.5 full-time equivalent jobs per room, that would see the city forego 2,250 jobs.”
Finney also pointed out that the UK regional average occupancy is lower than the Scottish capital at 75.5% and the average daily room rate is only £71.77.
However, he agreed with the EHA in its opposition to a tourist tax, saying “there is a danger the government could kill the goose that lays the golden eggs”.