|Hilton is rebranding the iconic Caledonian Hilton under the company’s Waldorf Astoria umbrella following a £24 million ($38 million) refurbishment.
REPORT FROM SCOTLAND—Government officials in Scotland are trying to lure more high-end hotel investment into the country’s lush green landscape to attract more “green” from high-end travelers.
Members of Scottish Development International, the trade and investment arm of the country’s government, have been busy attending hotel industry events in the past year to raise awareness and build relationships to match Scottish developers with global brands, said Stuart Ward, VP of tourism investment.
The goal is to build more hotels at the “quality end” of the market, he said.
There are 941 existing hotels in Scotland, according to STR Global, sister company of HotelNewsNow.com. Nearly two-third are classified as independent, while a little more than 10% fall into the luxury, upper-upscale and upscale segments.
“At the end of the day, we’re trying to attract more high spending international visitors into Scotland,” Ward said.
His team’s efforts are coming after a strong year for the Scotland. According to Ward, nearly 16 million tourists visited the U.K. country during 2011, which is up 9% from the year before. Total spend was $4.1 billion, which was up 14%.
July year to date, Scotland’s hotel industry reported a 1% increase in revenue per available room to £47.99 ($75.90), a 1.2% increase in average daily rate to £66.82 ($105.68). Occupancy was virtually unchanged at 71.8%, according to STR Global.
Looking ahead, the government officials are banking on a number of high-profile events in 2014 to continue to pique the interest of travelers—and investors. Among them: the XX Commonwealth Games in Glasgow; the 40th Ryder Cup at The PGA Centenary Course at Gleneagles; and the government’s “Second Homecoming”—a yearlong celebration that invites people with Scottish ancestry to return for a visit. The last homecoming event, held during 2009, attracted 95,000 additional visitors and generated £53.7 million ($85 million) in additional tourism revenue.
But while the outlook is rosy, actual hotel development has been relatively sparse. There are 21 projects in the country’s total active pipeline, less than 20% of which fall into STR Global’s three upper-tier chain scales.
Brands bubbling with interest
Still, there are indications Scottish Development International’s efforts are generating some interest.
Hilton Worldwide, for one, is actively shopping its Hilton Garden Inn brand throughout the country.
“We introduced Hilton Garden Inn to the Scottish market in 2010 with the opening of Hilton Garden Inn Aberdeen, and followed this up a year ago with Hilton Garden Inn Glasgow City Centre,” said Nick Smart, VP of development, U.K., Ireland and Nordics.
“In addition to Hilton Garden Inn and Hampton by Hilton brands, we see real opportunity to add value through our upscale DoubleTree by Hilton brand, primarily through conversion. DoubleTree by Hilton is the fastest growing upscale brand in the U.K., and we are actively seeking to grow our presence to complement the existing Scottish DoubleTree by Hilton hotels in Dunblane and Aberdeen,” he added.
Hilton is in “advanced discussions” for a number of opportunities in Scotland, but no deals have been confirmed, Smart said.
The company in September will bring its iconic Caledonian Hilton under the company’s Waldorf Astoria umbrella following a £24 million ($38 million) refurbishment.
“The Caledonian, A Waldorf Astoria Hotel, epitomizes the manner in which we see our development strategy progressing, establishing a portfolio of authentic and unique luxury properties each with their own identities and backgrounds,” Smart said.
Hilton manages the hotel on behalf of an owner partner. The group has an additional 14 properties and 2,055 rooms in Scotland at present.
Wyndham Hotel Group, meanwhile, is busy readying its first foray into Scotland with the recently announced Wyndham Grand The Angus, an upper-upscale offering set to open in 2015.
The 187-room, 10-lodge property, which also will include an 18-hole golf course designed by PGA Tour member Darren Clarke, comes as the result of a franchise agreement with MAP Property & Leisure Developments Angus Limited.
“It’s an ambitious project looking to set a new standard for golf resorts in Scotland, known around the world as the home of golf, and presents a great opportunity for us to bring the Wyndham brand to the country,” said Robert Loewen, executive VP and CFO.
Wyndham has no other executed deals in Scotland to date.
Sheraton Hotels & Resorts
The same is true for Starwood Hotels & Resorts Worldwide, although the group is seeing a significant capital infusion into one of two existing assets in Scotland, according to Hoyt Harper, global brand leader for Sheraton Hotels & Resorts.
“The relaunch of the Sheraton Grand Hotel & Spa is part of a multiyear global revitalization effort, which has seen Sheraton and its owners invest more than $6 billion in new hotel openings, renovations and signature brand initiatives around the world. As one of our flagship hotels, the newly renovated Sheraton Grand Hotel & Spa in Edinburgh showcases our commitment to making the brand an unparalleled leader in the hospitality sector,” Harper wrote in an email.
The property’s owner, Hotel Corporation of Edinburgh, did not disclose a specific dollar amount of the refurbishment.