Aberdeen hotel trade continues on downwards trend

The downturn in the North Sea energy industry has hit Aberdeen’s hotel sector for another month, according to latest data.

Trade for Granite City hotels in October “unprecedentedly” slumped below £50 on the revenue per available room ‘revpar’ benchmark, according to the latest monthly LJ Forecaster’s Scottish Intercity Report.

The tourism market specialist LJ Research said Aberdeen’s revpar was £49.18, its lowest rate for several years and down by 37% on October 2014, according to LJ Research.

Hotels in Briain’s oil capital sold 66 per cent of their rooms last month, compared to 77 per cent a year ago, a decrease of nearly 15 per cent and the 11th consecutive month of negative occupancy growth, the report says.

Meanwhile, Edinburgh and Glasgow hotels delivered modest gains last month, the report added.

Revpar in Scotland’s two biggest cities was “slightly” up and strong levels of demand for accommodation saw average hotel occupancy in both reach an “impressive” 88 per cent, a small yearon-year rise, the report says. Average room rates (ARR) were highest in Edinburgh at £94.91, down slightly from £94.98 a year ago, and lowest in Glasgow at £74.58, compared with £75.18 last year.

Aberdeen’s ARR last month was £74.94, which was a “staggering” 26 per cent below the £101.02 seen in October, 2014. Speaking on the eve of the report’s publication today, LJ Research managing director Sean Morgan said: “In September, we saw revpar reductions in all three cities so it’s pleasing to see some, albeit very marginal, growth for hotels in Scotland’s two largest cities last month.

“In Aberdeen, revpar tumbled unprecedentedly below £50 which very much is an indication of the ongoing troubles in the oil and gas sector and stubbornly low crude oil prices.”

Analysis of forward bookings over the next three months highlighted continued sharp reductions in trade for Aberdeen hotels and evidence of similar levels of bookings in Edinburgh and Glasgow.

But there were also signs of slightly weaker November bookings in Edinburgh and Glasgow, compared with last year.

Aberdeen City and Shire Hotels’ Association chairman Iain Watson said: “The hotel sector continues to be affected by the downturn in the North Sea and there will be no quick fix.

“We can expect a continuation of these challenging times in the months ahead.

“But we are confident, as has been evidenced in the past, of a recovery in the energy sector. No one expects that to happen in the shortterm, but many developers are looking to the longterm picture and continuing to invest in new hotel builds and extensions.”