The data, which is compiled and produced by Hotstats and analysed by RSM UK, shows hotel payroll (as a percentage of revenue) in Scotland increased from 31.7% to 32.4% in April year-on-year, and from 31.6% to 33.3% in the UK – likely to be a combination of the rise in employers’ National Insurance contributions and National Minimum Wage.

Average daily rates (ADR) of occupied rooms in Scotland increased from £125.57 to £126.33 in April year-on-year, but fell in the UK from £138.29 to £137.54 during the same period.

Increased demand meant revenue per available room (RevPAR) rose 3.8% year-on-year to £97.12 in Scotland, and by 3% in the UK. Scotland also saw gross operating profits rise from 28.2% in April 2024 to 30.3% in April 2025. However, the UK’s RevPAR wasn’t enough to offset the increase in costs, with gross operating profits for the same period down from 31.8% to 30.1%.

Stuart McCallum, partner and head of consumer markets in Scotland at RSM UK, said: “Scotland’s hotel sector was hit with a double whammy in April as hoteliers battled with a rise in employment costs combined with deflationary pressure on room rates. However, they still managed to offset the increase in employment costs and generate a rise in profits, against the downward trend seen in the wider UK market, which saw a fall in daily rates and loss of profits.

“Despite last month’s bump, and higher overheads in April, it seems the industry is managing these cost pressures well while maintaining its large workforce. Much of Scotland’s hotel footfall comes from international tourists seeking luxury stays, with hotels continuing to invest in their facilities and services to offer visitors a range of experiences including fine dining, whisky tasting and bespoke packages.

“We’ve seen a shift in behaviour from tourists visiting Scotland as they trade up their accommodation for more high-end stays, with hoteliers mirroring this trend to focus on quality over cost-cutting. Sites such as Cromlix House and The Glenturret have enhanced their offerings with exclusive whisky tastings, excursions and private dining, which aside from boosting Scotland’s economy outside of Edinburgh, will grow revenue and compensate for extra payroll costs.”

He added: “The challenge is now sustaining this momentum given the current economic and geopolitical climate. The UK government’s plans to tighten immigration rules could impact staffing levels due to the sector’s reliance on seasonal and international workers. As Scotland approaches the busy summer trading period, hoteliers will need to proactively manage these risks to avoid labour shortages and ensure service standards remain high.” 

Thomas Pugh, economist at RSM UK, added: “The RSM Hotels Tracker backs up two trends that we have seen elsewhere in the economy. First, the disruption from US tariffs and subsequent surge in uncertainty last month doesn’t seem to have stopped consumers from spending money. Indeed, we saw stronger retail sales, hotel bookings and pub spending in April. This is probably a reflection of UK households’ real incomes rising strongly over the past few years and, ultimately, that is a bigger driver of UK consumer spending than US trade tariffs.

“Second, even though headline CPI inflation jumped to 3.5% in April, this was almost entirely down to utility, tax rises and the late Easter. We saw little evidence of firms passing on the increase in employment taxes and that is backed up by the data for hotels.

“Admittedly, the economy will weaken in Q2 and is now facing a series of headwinds, including tariffs, uncertainty, higher taxes and slower global growth, which it wasn’t facing at the start of the year. That means growth will probably come in around the same as last year at a little over 1%. But the signs suggest that consumers are getting a bit more comfortable with opening their wallets, which will be a strong tailwind to offset all those headwinds.”