Glasgow and Edinburgh hotels shine while Aberdeen continues to flounder

The firm’s monthly hotel survey found that year-on-year revenue grew 12.0 per cent in Edinburgh during March and was up 8.3 per cent in Glasgow.

Inverness had almost static revenue increasing just 0.1 per cent whereas Aberdeen’s fell by 43.0 per cent.

Occupancy rose in Edinburgh by 3.4 per cent during March but was down 17.1 per cent in Aberdeen; 2.0 per cent lower in Glasgow and 1.5 per cent down in Inverness.

Occupancy across all parts of the UK, with the exception of Wales, fell fairly uniformly at a rate of between 1.5-1.8 per cent.

However, Scotland was the only part of the UK that saw an overall revenue drop of 4.0 per cent and this was due to the very large decrease in Aberdeen’s performance. In regional UK revenue rose 1.5 per cent; was up 1.9 per cent in England and increased 5.8 per cent in Wales.

Alastair Rae, head of BDO’s Audit Practice in Scotland, said: “The hospitality sector in Edinburgh and Glasgow had an excellent March with considerable revenue increases in both cities. The early Easter and the Six Nations rugby helped Edinburgh increase revenues from leisure activities while Glasgow benefited from a number of concerts and events during the month. For Inverness the month was a steady as she goes period with little change in occupancy or revenue.

“For Aberdeen’s hospitality sector the situation remains very difficult. The considerable drop in revenue remains quite stark and is obviously linked to the double digit decline in occupancy. Although Aberdeen’s revenue is falling from a very high figure a 43.0 per cent drop in year on year numbers is a concern.”

Mr Rae continued: “Hoteliers need to watch their costs and manage their businesses very carefully in the coming year as the downward pressure on revenue is intense and is unlikely to recover to recent levels any time soon.”

He concluded: “The hospitality sector as a whole is very susceptible to negative feelings or uncertain perceptions and the economy has been jittery since the start of the year. The EU referendum is part of this but equally there are signs that businesses and consumers are concerned that we are not exiting the downturn as rapidly as expected and it may be some time before the UK economy feels positive once more.”

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