Tourists undeterred as room rate hikes higher than levy – Daily Business

Scottish hoteliers are enjoying a surge in bookings and higher room rates that may overcome any concern that tourists will be deterred by the visitor levy.

Average daily rates in June soared by up to 8.5%, above the UK average of 6% and well above the 5% visitor levy being imposed by Edinburgh city council. Similar levies are due in other locations.

Tourists have flocked north of the border to escape the searing heat, which may point to even higher increases in the occupancy rate than the June figure which edged up to 84.9% from 84.5% in June 2025.

The data, which is compiled and produced by Hotstats and analysed by RSM UK, shows average daily rates (ADR) of occupied rooms in Scotland rose to £182.46 in June, up from £168.14 in June 2025. Across the UK, there was a more modest rise to £174.69 from £165.33.

Revenue per available room (RevPAR) increased by 9% in Scotland to £154.92 from £142.10 and to 144.91 from £137.77 across the UK.

However, those compiling the data warned that there is a tipping point where costs become so high that tourists opt for other destinations.

The data also suggests that the higher room rates failed to feed through into operating profits, which remained relatively flat in Scotland at 45.7% in June 2026, up slightly from 45.1% in 2025. This trend was mirrored by the overall UK figures, which rose marginally to 42.2% from 41.8%.

Katie Morrison, partner and head of consumer markets at RSM in Scotland, said: “Demand for Scottish hotels is proving robust in the crucial summer months, giving the sector the opportunity to increase room rates and make the most of the seasonal boost.

“However, operating profits remain relatively flat, which is a clear reflection of the persistent cost pressures and underlying challenges the sector faces.

“Currently, hoteliers in Scotland can pass on these additional costs to the customer, but ever-increasing room rates won’t be sustainable in the long-term.

“Hoteliers must strike a balance between maximising profits through higher room rates and remaining an attractive option for consumers.

“With the average daily rate for Scottish hotels rising above the UK average in June, there’s a risk that tourists may opt for more affordable destinations, ultimately hampering demand in the region.

“This could support the more rural areas of Scotland, where hotel prices are often cheaper than cities such as Glasgow and Edinburgh, but larger and more luxury hotels may need to consider investing in their services to maintain a competitive edge.

“With the onset of the Commonwealth Games in Glasgow and Edinburgh Fringe Festival across July and August, we will likely see strong demand continue throughout summer.

“The challenge for hoteliers now lies in ensuring they are positioned well to weather the quieter winter months, particularly if economic headwinds and cost pressures remain.”