Scotland’s luxury hotel market is continuing to push rates higher and investors continue to be on the hunt for luxury experience-led assets beyond the country’s established hotspots.
This is as in 2025, properties at the top end of the market across Scotland recorded occupancy of 67.9 per cent, up 1 per cent year-on-year, according to CoStar data compiled by Savills, with ADR increasing 3.6 per cent to £280.55 and revpar climbing 4.6 per cent to £190.50.
The rates conversation
While Scotland may not command the rates seen in markets such as Paris, Milan, Rome or London, in an exclusive conversation with Hospitality Investor, head of hospitality thought leadership EMEA at Savills Thomas Emanuel described the Scottish luxury market’s performance as “strong”, noting outperformance on some measures compared to some other European luxury markets.
“Luxury performance in Scotland is stronger than in the Netherlands or Germany, Ireland, Poland and Sweden, for example,” he said, adding “although it still lags markets where cities such as Paris, Milan, Rome and London pull up national average rates, occupancy is very much in line with what we see across other luxury markets. So Scotland sits somewhere in the middle but very respectably so.”
This is as rate increases, not occupancy, have been the primary driver of Scotland luxury growth due to consumers at the top end being less sensitive to price increases. But the big question is how long rate can continue carrying growth.
While luxury remains better placed than other hotel categories to push prices further Steven Fyfe, director of hotel capital markets at Savills Scotland, notes different luxury products serve different guest profiles and budgets as he highlights a range of products outside of conventional five-star city hotels with draws including golf, whisky, coastlines, scenery and country-house experiences.
Emanuel agrees. “It comes back to selling the right room at the right price at the right time to the right consumer through the right channel. I still have some confidence confident about luxury's ability to grow in comparison to other classes. A 10 per cent increase in rate won’t make much difference to the luxury guest compared to others.”
A tale of two more cities (and towns)
Luxury occupancy in Edinburgh reached 76.9 per cent in 2025 compared with 62.2 per cent in provincial Scotland, defined for Savills’ analysis as the country excluding Edinburgh, Glasgow and Aberdeen. ADR was also higher in Edinburgh at £299 compared with £275 outside the three principal cities.
Edinburgh owes this to a broader and more year-round demand base including corporate business and events while regional markets remain more dependent on leisure. Across segments, the city recorded 118 nights with occupancy above 90 per cent in 2025, equivalent to almost a third of the year.
“When there’s that much demand in town, it really gives you the ability to push the average rate. So even though you might find some more exclusive country house or golf properties in the Highlands or in the in the non-urban locations, all those other demand drivers and factors really help to increase the overall performance in Edinburgh versus the wider provincial market,” Emanuel says.
However, lower regional occupancy doesn’t necessarily spell all doom and gloom. Fyfe highlights the opportunity when it comes to the topic of seasonality, noting operators beginning to make greater use of the shoulder and off seasons.
“Looking outside the gateway cities, there’s opportunity for investors and operators to grow occupancy in what are perceived as off-season months. We see it happening. We're seeing operators use those periods to their advantage,” Fyfe says.
He adds that for the regional markets, luxury demand is being driven by experience, privacy and exclusivity, with Scotland's remoteness and space becoming part of the proposition.
USP
The numbers elsewhere in Scotland reinforce the importance of experience-led hospitality, although they also provide a warning about assuming demand growth automatically equals stronger hotel performance.
Savills' analysis found resort hotels recorded the strongest revpar growth of the categories examined at 10.8 per cent alongside the highest ADR of £348.82. Country-house hotels followed with 10.5 per cent revpar growth. Golf hotels enjoyed the strongest demand growth at 16.6 per cent as supply expanded by 24 per cent. Country house hotels delivered double digit revpar growth at 10.5 per cent. Coastal hotel demand increased 10 per cent, however a 15.4 per cent increase in supply contributed to revpar falling 4.6 per cent.
But Emanuel says the declines need to be viewed in context.
“We saw revpar down a little bit in the golf and coastal hotels but that was because so much new supply entered the market, which points obviously to the attractiveness of it. Ironically, even though revpar was down, they were the two segments that saw the most demand growth. So the greatest number of rooms actually sold. It was just sold amongst a far bigger pool of pool of properties,” he explains.
The investment opportunity, they note, may consequently be about targeting concepts instead of geographical hotspots. They add that the strongest prospects may not necessarily be where conventional hotel demand is already easiest to demonstrate but where a property can turn Scotland’s unique selling points i.e. landscape, remoteness, heritage and experience into projects that can overcome seasonality.
Fyfe names properties including Skibo Castle, The Torridon and Fonab Castle as examples of projects whose owners demonstrated demand despite others questioning whether a market existed. He also points to golf investment around Dornoch and new whisky distillery development in Speyside as activity capable of attracting further hospitality capital.
“We're not just talking about new hotels here. We're talking about reinvestment into existing hotels,” he says.
Looking forward, Emanuel is positive about the outlook.
“Demand is still growing, and overall across Scotland, we're not seeing a high supply growth market either so that sets us up for stronger occupancy. We've seen more airlift going into Edinburgh and potentially more interest in Aberdeen. The demand side looks really positive and luxury guests remain relatively price insensitive. I feel pretty bullish about the market,” he says.