The hospitality sector globally is facing a perfect storm of cost pressures and consumer caution. However, the upcoming winter period, covering the festive season and subsequent low-demand months, presents SMEs with a strategic opportunity to shift from simply surviving to actively thriving.
By capitalising on resilient domestic demand, implementing targeted regional marketing, and highlighting authentic, unique local experiences, businesses can successfully drive bookings and revenue—provided they manage their operational costs with fierce precision.
Scotland presents a unique case study. Demand for Scotland’s headline festive events — Christmas 2025, Hogmanay 2026, and winter short breaks — remains resilient. But consumer confidence, operational costs, staffing shortages, and policy shifts mean SMEs face a complex, margin-sensitive winter.
The challenge for smaller operators is not demand itself, but turning demand into profit.
Let’s see what we can expect, as our research has suggested.
Scottish Winter Bookings Forecast (Dec 2025–Jan 2026)
Based on 2024 VisitScotland Accommodation Occupancy data (Dec 2024: RevPAR £149.93; occupancy 64.1%).
This forecast, produced by NorthStar Consulting Market Research Team, projects three realistic scenarios for hotels, guesthouses, and larger self-catering operators.
| Scenario | Dec 2025 Occupancy | Dec 2025 RevPAR | What This Means for SMEs |
|---|---|---|---|
| Pessimistic | 59.1% (–5 p.p.) | £143.16 (–4.7%) | Significant margin pressure. Value-led offers, long-stay deals and strict cost control required. |
| Baseline | 65.5% (+1.4 p.p.) | £152.39 (+1.6%) | Stable but tight margins. Destination campaigns offset cost-of-living drag. |
| Optimistic | 67.1% (+3 p.p.) | £156.20 (+4.2%) | Good uplift if marketing converts. Strong cost management needed to realise profits. |
RevPAR elasticity (RevPAR = revenue per available room): Baseline and Optimistic projections assume an elasticity of 0.75 — meaning a 1% occupancy shift equals roughly a 0.75% change in RevPAR.
As the analysis suggests, even in the most optimistic case, rising costs could erode gains unless SMEs focus on operational efficiency and offer differentiated products or services.
Cost Pressures and Policy Shifts: The Hidden Threat to Profitability
Although demand for festive travel remains relatively resilient, the real challenge facing Scottish hospitality SMEs this winter lies in the cost and policy environment surrounding that demand.
Rising operational expenses are the most immediate concern. Recent surveys show that businesses continue to grapple with steep increases in energy, supplier and staffing costs — pressures that can easily wipe out the modest revenue gains forecasted for December and January. For many operators, especially smaller ones, these rising overheads are putting cash flow under acute strain.
Consumer Confidence
At the same time, consumer confidence has softened. Reporting in the Retail Gazette during November 2025 highlights that cost-of-living concerns are still shaping household decision-making. Travellers are delaying their commitments, often waiting until the very last minute to book, and they remain cautious in their discretionary spend. This behaviour has created shorter booking windows and more price sensitivity, particularly in the domestic market, which winter trade relies heavily upon.
>Staffing Shortages
The staffing challenge only adds another layer of complexity. Rural and island businesses, in particular, continue to struggle with recruiting and retaining skilled workers during the winter season. Those who do secure staff often face higher wage competition and must rely on multi-role positions to keep operations running. This can stretch teams thin at exactly the time when visitor expectations peak — Christmas, Hogmanay and early January — placing pressure on the consistency of the guest experience.
Finally, policy changes such as the introduction of the Edinburgh Visitor Levy are reshaping the pricing landscape.
For urban SMEs, the tourist tax introduces another variable that must be factored into festive packages and rate strategies. Operators now need to communicate levy-inclusive pricing clearly to avoid confusing guests, while still keeping their offers competitive against other UK and European winter destinations.
Together, these forces create a difficult operating environment: solid demand on the surface, but profitability increasingly challenged beneath it.
Maximising Winter Bookings through Innovation and Collaboration
Scottish hospitality SMEs have a real opportunity to shift their performance closer to the optimistic winter forecast by aligning their products and marketing with the trends currently shaping traveller behaviour. The strongest gains will come from leaning into Scotland’s unique strengths, responding to domestic cost pressures, and optimising online visibility so that winter experiences rank well across both traditional search engines and AI-driven discovery tools.
One of the most effective strategies is to rethink how Scotland positions itself against the European winter market.
Rather than competing directly with cities that have centuries-old market traditions, Scotland’s advantage lies in being different.
Nature-Led Breaks
Visitors who are looking for alternatives to busy urban markets are increasingly searching for nature-led winter breaks, coorie-themed retreats, whisky-led cultural experiences and remote escapes that feel atmospheric and distinctly Scottish. Businesses that build their winter messaging around these themes — and optimise their online content around long-tail search terms linked to dark skies, wild winter adventures or Scottish heritage — are more likely to capture travellers who are already seeking something unique.
There is also a clear opportunity to capture domestic demand through the growing appeal of self-catering. With households remaining highly cost-aware, travellers want options that offer flexibility, control over food costs and space for families or groups.
The self-catering sector is perfectly placed to service this demand, especially if operators position themselves as Scotland’s “home-away-from-home” solution during the winter months.
Long-Stay and Value-Led Breaks
Promoting long-stay offers and value-led breaks during quieter periods in January and February can help increase occupancy at times traditionally considered “dead season.” Search-optimised content that emphasises affordability, flexibility and family-friendly winter accommodation is well-positioned to capture domestic searches around winter budget travel.
Another major growth area lies in the rising demand for coorie-themed and nature-based winter escapes.
This aligns well with the idea of chasing and experiencing starry skies, outdoor adventure and immersive cultural experiences. Travellers are increasingly looking online for specific types of winter packages, making it essential for SMEs to develop clear, productised experiences that can rank in AI and search results.
Packages built around fireside comfort with whisky tasting, astronomer-led stargazing in Scotland’s low-light regions, or guided winter walks in the Highlands perform strongly because they match high-intent search behaviour. These kinds of curated experiences not only increase visibility but also enhance perceived value, making them more resilient during periods of cautious consumer spending.
Collaboration and Co-creation a key to growth and success
Collaboration is another powerful tool for increasing reach without increasing cost. With many SMEs facing tight marketing budgets, regional partnerships can amplify visibility far beyond what individual operators could achieve alone. The success of initiatives such as “Northern Nights” demonstrates the impact of presenting a cohesive regional winter offer. When businesses link to each other’s experiences, maintain consistent local business information and co-create content around their shared location, search engines begin to recognise the area as a strong authority for winter travel. This helps local operators appear more prominently in searches for queries like “winter things to do near [town name]” or “best winter breaks in [region].”
Finally, operational excellence remains crucial to achieving profitable winter trading. Winter bookings are increasingly last-minute, which makes flexible, dynamic pricing vital for capturing demand while protecting margins. Technology that automates pricing or manages cancellation flexibility can significantly improve yield during the critical final days before arrival. At the same time, cost control must remain front and centre. Energy-efficient systems, AI-assisted booking tools and smarter staffing models help businesses maintain profitability even if occupancy fluctuates. For smaller operators that depend heavily on winter trade, the combination of tight cost management and agile pricing is essential for weathering uncertainty while maximising revenue.
Christmas in Scotland?
In a winter shaped by rising costs, shifting consumer behaviour and increasing competition, these strategies provide Scottish hospitality SMEs with a comprehensive roadmap for growth — one that blends authentic Scottish experiences with smart, search-aware marketing and disciplined operational management. Cooperation, collaboration and idea-generation are core. Get in touch with us and see how we can assist you in building a great Winter experience for your guests.
