Aberdeen slips as Scottish hotel revenue and occupancy rises

Scottish hotel revenue and occupancy rose slightly in February despite a slip in Aberdeen, according to the latest report by accountants and business advisers BDO.

The firm’s monthly hotel survey found that year-on-year revenue (the industry term for rooms yield) rose 6.0 per cent to £46.03 in Scotland compared to an increase of 11.3 per cent in regional UK to £42.49; a rise of 12.1 per cent in England to £41.85 and an increase of 5.0 per cent to £36.97 in Wales. Occupancy rose 2.6 per cent in Scotland compared to an increase of 3.1 per cent in regional UK; up 3.2 per cent in England and 2.2 per cent in Wales.

The impact of the lower oil price began to be felt in Aberdeen as occupancy and revenue both fell during February. Occupancy dipped 1.6 per cent while revenue was down 4.1 per cent during the month compared to an increase of 12.6 per cent in occupancy and a 21.6 per cent rise in revenue in Inverness.

In Edinburgh occupancy rose 4.4 per cent and revenue was up 10.4 per cent.

Glasgow had a 1.6 per cent rise in occupancy coupled with an 8.4 per cent increase in revenue.

The strong performance in Inverness occurred when the city hosted the Scottish Symphony Orchestra and the Energy North Conference during the month.

Alastair Rae, a partner in the property, leisure and hospitality sector at BDO, said: “The expected fall in demand and its consequent impact on occupancy and revenue has begun in Aberdeen as the oil and gas sector reviews its spending in the city. There have already been substantial job losses in the sector and a shifting of the workforce to other fields so it is to be expected that the hospitality sector will bear the brunt of some of this downturn.”

“However, it should be remembered that the revenue figure for Aberdeen is the highest outside London despite the dip so there is still some way to go before doom and gloom descends upon the marketplace.”

Mr Rae added: “Inverness had a buoyant month with considerable occupancy and revenue increases and attracting events for the off season is a clever way to maintain demand when tourists are in short supply.”

“In Edinburgh the tourist season almost never seems to end and the capital recorded a strong increase in occupancy and, particularly, revenue with a 10.4% rise year on year. Glasgow’s revenue figure was also strong despite a relatively low increase in occupancy.”

Mr Rae concluded: “Aberdeen aside, these figures continue to point to an improving market for the hospitality sector as the economy gets better and both business and leisure travellers start to spend once again. I would expect the wider market to continue to improve this year with the caveat that Aberdeen is likely to face a roller coaster ride for some months to come until the oil and gas sector works out the long term future for the North Sea.”

This hotel trends survey has been published since the early 1970s and features a broad range of hotels in the 3 – 4 star categories.