The Scottish hotel industry could generate the highest returns in Europe if there is an increase in investment to the luxury-end of the market, according to Scottish Development International (SDI).SDI is a government organisation that helps investors source high-yielding, long-term hotel investments in Scotland.Hotels in Edinburgh had the highest occupancy rates in Europe at 86 per cent and 92 per cent in May and June respectively, followed closely by Invernessl. Edinburgh not only beat other UK cities on occupancy (including London) but also established tourist centres such as Paris, Rome and Amsterdam.The average rate earned from hotel rooms in Edinburgh is also on the increase: the room rate increased 8.1 per cent in the year to June 2011 to £95.58, along with the ‘stellar’ occupancy rate increase, according to accountancy firm PKF2.However, in order for the overall return from room rates to surpass industry leaders Paris, London and Rome, Scotland will need an influx of investment into luxury and mid-tier hotels to capitalise on the region’s growing number of tourists.Scottish Development International therefore calls on all investors wanting to capitalise on this popularity to consider the huge potential the Scottish hotel sector is showing. Kenneth Clark, Head of Tourism from Scottish Development International said: ‘Scotland’s pre-eminence as a tourist destination is clear from the fact that we are outperforming many of the world’s most established tourist centres on room sales.‘However, to surpass them on overall returns, we need to add to our selection of quality, luxury hotels in order to increase our revenue per available room (RevPAR). This presents a great opportunity for long-term investors to benefit from Scotland’s quality assets and growing status as a global tourist destination.Scotland also beats England and Wales on average hotel room yield. The yield in May increased 3.1 per cent to £55.83 in Scotland. From / Gulf Today