A RISE in the number of hotel rooms in Scotland’s largest cities has led to a fall in revenue generated per available room.

However, the increased investment means Glasgow and Edinburgh are in a strong position for future growth in visitor numbers, a new report from PwC has found.

PwC’s Hotels Forecast 2019-2020 shows that both Glasgow and Edinburgh have added more than 2,000 rooms between them in the last year - with slightly more than 1,000 of those in the Scottish capital - but this has led to a fall in occupancy levels and the average daily rates slipping in both cities.

A further 5,000 are due to open by the end of 2020, the accountancy firm said.

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In Glasgow, RevPAR (revenue per available room) was down 8.5 per cent to £52.57 having grown by 8.2% in the previous 12 month period. Glasgow room numbers grew to almost 12,000 with a total in the Scottish capital of around 15,000.

The Edinburgh increase led to a 2.3% fall in RevPAR, to £71.52. The Scottish capital also lost its long-held slot as the most expensive city in the UK to spend the night outside of London to Brighton.

The new openings led room availability in Edinburgh to increase by 5.5%.

Edinburgh hoteliers face further pressure from the proposed Transient Visitor Levy, which could add 2% or £2 to the cost per night. In Aberdeen RevPAR fell by 2.1%.

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A further challenge comes from the potential reduction in EU nationals for recruitment due to Brexit concerns.

Claire Reid, head of PwC Scotland, said: “From international business conferences to the ‘Outlander’ effect that has given our tourism industry a boost, more people are looking for somewhere to stay in Scotland, and that is an opportunity which investors have capitalised on with more than 2,000 new rooms opening across our three largest cities in the last year.

“This has impacted the RevPAR figures in Edinburgh, Aberdeen and Glasgow, with the latter seeing this most keenly felt, however we believe that while the metric is key to providing a snapshot of the hotel industry’s health, the expansion of room numbers shows a confident sector well-placed for future growth in visitor numbers.

“However, we expect RevPAR to reduce further as the number of new openings accelerates through 2019 and 2020 until the point the increasingly demand is absorbed by the supply.”