Aberdeen’s hotel woes continue while Inverness and Edinburgh shine

The firm’s monthly hotel survey found that year-on-year occupancy in Aberdeen dropped 21.8 per cent to 63.6 per cent whilst rooms yield (the industry term for revenue) fell 33.6 per cent to £52.34. Glasgow’s hotels experienced a drop in occupancy of 3.0 per cent and in revenue of 22.3 per cent due to the year-on-year comparison with last year’s Commonwealth Games.

In contrast rooms yield in Inverness rose 10.5 per cent to £83.37 and Edinburgh was up 12.0 per cent to £78.25 making these two cities the first and second best performers in the UK outside London.

Due to the contrasting performance of Scotland’s cities overall occupancy was down 4.4 per cent compared with an increase of 0.2 per cent in regional UK; up 0.5 per cent in England and up 4.3 per cent in Wales. Revenue was down 9.1 per cent in Scotland compared to an increase of 5.5 per cent in regional UK; up 6.6 per cent in England and a 20.2 per cent increase in Wales.

Alastair Rae, a partner in the property, leisure and hospitality sector at BDO, said: “It is apparent that the woes affecting the oil and gas sector are continuing to have a negative impact on the hospitality sector in Aberdeen. Unfortunately there is little sign of this ending until the oil price rises and the future of the sector becomes clearer. The revenue for July this year is the lowest since July 2011 when it dropped to £50.00 and we have had several years of increased costs since then so the impact on the bottom line is more severe this time around.”

“For hoteliers in the granite city there is little option but to batten down the hatches, keep an eye on costs and margins, and try to draw in business and leisure visitors unrelated to oil and gas over the next few months and years.”

Mr Rae continued: “The drop in Glasgow’s occupancy and revenue is expected when compared to the outstanding July 2014 the city had when it hosted the Commonwealth Games and indeed the revenue numbers are higher than their comparable figure from July 2013 when it was just £45.31. Perhaps there may be a post-Games boost drawing more visitors to the city. For Inverness July was a bumper month producing outstanding revenues indicating a return to the good times of previous tourist years.”

“Edinburgh, as ever, is the steamroller of tourist destinations driving forward with increased momentum as the capital’s occupancy and revenue soars to the heady heights of the Festival in August. For hoteliers the summer in Edinburgh is the icing on an already abundant cake given the city’s status as an all year round tourist destination.”

Mr Rae concluded: “These figures show that Scotland’s hospitality sector is having a good year. Inverness, Edinburgh and Glasgow all had an excellent July and it is only Aberdeen which is experiencing long term falls in occupancy and revenue. Unfortunately I think the situation in Aberdeen will persist and that the hotel sector needs to try to diversify its customer base in future to cope with the declining numbers.”

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