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Gulf investors keen on investing in Scottish hotels

SCOTLAND, November 17, 2015

Gulf investors are keenly eyeing Scotland’s hospitality sector as it continues to perform impressively well with total returns for investors in Scottish leased hotels having grown 9.5 per cent year on year over the last five years.

A research, undertaken by Scottish Development International in association with MSCI, found that total returns from hotels ranked Scotland as the second best market out of 13 competitive European countries with regards to total investment returns in the leased hotel sector. Scottish hotels produced a total return of 15.2 per cent year-on-year for investors in 2014. This reflects a further strengthening of performance from 2013, when a return of 9.2 per cent year-on-year was recorded.

The study also found that:

  • The Scottish performance followed an improving European trend for the hotel sector in 2014. The rest of UK hotels were the top performing in Europe with a return of 17.2 per cent year-on-year, up from 11.3 per cent in 2013. Overall, Pan-European hotels returned 8.9 per cent year-on-year (in local currency) last year, up from 6.5 per cent year-on-year;
  • Capital value growth of 9.1 per cent year-on-year helped drive higher returns for Scottish hotels in 2014, when combined with an income return of 5.6 per cent year-on-year. Capital values in Scotland have now grown by a cumulative 13 per cent since the market crash in 2008;
  • Arab businesses have already started to invest into Scotland’s increasingly attractive market; 

Tom Marchbanks, regional manager Middle East, Scottish Development International, said: “Scotland has established itself as a primary destination for high end tourists from the Arab world because of what it has to offer in terms of its authenticity, excellent hospitality and diverse experiences. With Emirates Airline two daily non-stop flights from Dubai to Glasgow, Scotland has become more accessible for those travelling from the Middle East through. Some of the world’s best global hospitality brands are based in this region and we are seeing more of them looking at the investment opportunities that Scotland has to offer.”

Graeme White, head of tourism at Scottish Development International, said: “Scotland’s reputation as a world class tourism destination has gone from strength to strength. Spending by tourists in Scotland generates around £12 billion of economic activity in the wider Scottish supply chain and contributes five per cent of Scottish GDP. The outlook for the sector is set to improve further with Scotland’s cities now seen by major brands as key locations to establish new business with many operators viewing Scottish hotels as ideal platforms for diversification.” – TradeArabia News Service

Tags: Gulf | investors | Scotland |

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