Scotland’s hotels see occupancy and revenue fall

The firm’s monthly hotel survey found that year-on-year occupancy in Scotland fell 5.6 per cent to 81.0 per cent and revenue was down 9.5 per cent to £51.73.

Regional UK occupancy was up 0.1 per cent at 80.8 per cent: England up 0.6 per cent at 80.7 per cent; and Wales up 5.3 per cent at 81.9 per cent. Revenue in regional UK was up 8.5 per cent at £50.44: rose 10.1 per cent in England to £49.55; and was up 42.2 per cent in Wales to £53.18.

Unfortunately, Aberdeen had the largest fall in occupancy and revenue of anywhere in the UK falling 19.7 per cent to 65.1 per cent and 45.7 per cent to £43.05 respectively. Edinburgh saw occupancy fall 4.5 per cent to 85.2 per cent and revenue was down by 0.8 per cent to £59.81. Occupancy in Inverness fell 3.8 per cent to 86.9 per cent but revenue rose 0.8 per cent to £56.26. Meanwhile Glasgow saw occupancy drop 1.4 per cent to 89.2 per cent but revenue rise 5.8 per cent to £60.71.

Alastair Rae, a partner in the Property, Leisure and Hospitality sector at BDO, said: “The substantial drop in occupancy and revenue in Aberdeen is not just down to the weakened oil price and its consequent dampening of demand in the city. It is in contrast to the very high figures in 2014 when the city hosted the biennial Offshore Europe conference which always results in very high occupancy and revenue numbers for the hospitality sector. Clearly, however, part of the drop is down to the declining oil price and the reduced activity of the sector which looks likely to continue for some considerable time to come.”

“Glasgow fared better than elsewhere in Scotland experiencing a good increase in revenue of 5.8 per cent. The reduced occupancy figure of 1.4 per cent was probably a reflection of the higher revenue numbers as the two figures work in tandem.”

Alastair continued: “The fall in occupancy and revenue in Edinburgh is perhaps an early indication of consumer confidence being slightly dented in the autumn and a small reduction in leisure activity.”

“Inverness continued to have a good year and has the best occupancy and revenue to date figures for 2015 of any of Scotland’s main cities. Occupancy in Inverness has risen 6.3 per cent and by 5.2 per cent to the end of October contrasting with a 14.4 per cent decline in occupancy and an 18.3 per cent fall in revenue in Aberdeen. Edinburgh has had a 2.2 per cent rise in occupancy and a 1.2 per cent rise in revenue to date while Glasgow has had a fall in occupancy of 0.1 per cent and revenue down 1.9 per cent during 2014.”

Alastair concluded: “While Edinburgh experienced a fall in occupancy and revenue this is in line with expectations for the time of year and I don’t believe indicates anything more serious. The overall results are fairly normal. This was perhaps a flatter month than some but, apart from Aberdeen, there is nothing to be concerned about. We will have to see what impact the growing concerns over the wider economy have on the Scottish hospitality sector in the next few months.”

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