THE hotel sector in Glasgow is growing faster than in any other UK city, according to a new study.

PwC’s latest hotels forecast report shows that the average cost for an overnight stay in Scotland’s largest city climbed by 7.5% in the first half of 2018 while occupancy rates rose to 79.1%.

The average daily rate (ADR) in Glasgow climbed to £73.41 from £68.31, while the key revenue per available room (RevPAR) benchmark was up by 8.2% to £58.08 – eight-times higher than the pace of growth in the UK overall.

In Edinburgh, however, both the occupancy rate and revenue generated per available room have fallen, though the Scottish capital remains the most expensive UK destination other than London.

RevPAR, which is calculated by multiplying the average achieved room rate by the average annual room occupancy rate, fell by 1.6% to £73.68 in Edinburgh, as occupancy dropped by 2.1% to 78.4%. In spite of this, the costs of staying overnight in the city increased by 0.5% to £93.92 – second only to the average daily rate in London of £141.16.

In Aberdeen, the ongoing recovery in the oil and gas sector helped RevPAR rise by 4.7% to £35.85, Occupancy rates increased by 4.7% but they remain low, at just 63.5%.

Liz Hall head of hospitality and leisure research at PwC, said: “Glasgow’s reinvention as a modern city with international appeal for both tourists and businesses continues, with the city’s hotels showing an impressive performance, driven by the 7.5% increase in average daily rate as more four-star hotels open.

“The performance of Glasgow’s hotels sector highlights the extent to which the city is now seen as a major tourist attraction with the number of international visitors increasing by a fifth to 787,000 in 2017.

“In Edinburgh, RevPAR remains the second highest of all UK cities, but this and occupancy rate have slipped probably as a result of new room supply and also competition from the home share market and serviced apartments.

“With more than two million visitors in 2017 and record numbers attending the Fringe and International Festival, there is little room for occupancy rates to go much higher in the city, and with ADR increasing, albeit moderately, Edinburgh remains well-placed”.

In the first half of 2018 there was almost £400 million worth of investment in hotels in Scotland, more than doubling the 2017 total in six months. The largest deal was the £85m sale of the Caledonian Hotel to Abu Dhabi-based Twenty14 Holdings.

Yet there is no sign of a slowdown in Scotland’s major cities. In Edinburgh new openings include the Courtyard Edinburgh while many major names such as The Balmoral, have seen increased investment. And at the more novel end of the scale, a floating hotel named The Fingal, is set to open in the autumn.

In Glasgow, new openings by Radisson Red, Motel One, Ibis Style and Marriot’s Moxy Hotel have increased available rooms, while developments are under way in both the international financial services district and the are around the Scottish Exhibition Centre.

Meanwhile, in Aberdeen, the Sandman Signature Hotel is set to open on the site of the former Robert Gordon University St Andrews Street campus.

Overall, PwC’s forecasts hotel trading growth to flatten in the year ahead due to economic uncertainty, weak business travel demand and an influx of new rooms opening.