Scotland to target Midde East investors to fund growth of luxury hotel market
Scottish Development International, Scotland’s inward investment arm, is eying wealthy Middle East backers to help grow its luxury hotels sector.
The state-led organisation believes the country’s hotel industry could generate some of the highest returns in Europe if it is able to secure fresh funding, SDI’s head of tourism said.
“The main target for investment in Europe has been London on the basis of the strong occupancy rates and the room rates that can be achieved in London,” Kenneth Clark told Arabian Business.
“I think the fact that over the last two to three months, Edinburgh hotels have actually outperformed London hotels in occupancy sends out a strong message.”
Middle East hotel operators including Jumeirah Group, Emaar’s hospitality arm and Viceroy Hotels, a unit of Abu Dhabi’s Mubadala Development, have showed keen interest, Clark said.
“[There is] very strong interest from the operator’s side in coming into Edinburgh so we know that interest is there. The trick now is to maintain that but at the same time bring in investment behind those,” he said.
Hotels in Scotland are outperforming tourism hotspots such as Paris, Rome and Amsterdam, according to data from PFK Hotel Consultancy Services.
Hotels in Edinburgh had the highest occupancy rate in Europe at 86 percent and 92 percent in May and June respectively, followed closely by Inverness.
Scotland’s average hotel room yield in May increased 3.1 percent to £55.83 ($91.92) compared to a 1.3 percent increase to £44.88 in England and 12.2 percent to £44.28 in Wales, said PFK Hotel Consultancy Services.
Airport traffic to Scotland has also increased. BAA, owners of Glasgow, Edinburgh and Aberdeen airport, said Thursday its Scottish airports recorded a 2.9 percent increase in passengers in June compared to the same period last year.
Jumeirah Group, the hotelier behind Dubai’s iconic flag-shaped Burj al-Arab, had planned to operate the Jumeirah Glasgow Hotel but the developer behind the luxury project went into administration in May.
The $200m glass-fronted, 26-storey tower was billed as the jewel in the crown in a huge rejuvenation of the Scottish city.
Billionaire Sheikh Maher Al Tajir, whose family owns the Highland Spring bottled water company, and Dubai’s Mohammad Omar Bin Haider Group have both previously invested in Scottish hospitality projects.