Aberdeen’s hotel sector has endured a second month with an over 40% drop in revenue as fallout from the oil industry crisis hits other sectors of the city’s economy.
During November Aberdeen’s hotel sector experienced its second successive monthly drop of over 40% in year-on-year revenue according to the latest report by accountants and business advisers, BDO.
The firm’s monthly hotel survey found that during November year-on-year rooms yield (the industry measure of revenue) in Aberdeen fell 42.3% and occupancy was down 11.9%. In Inverness revenue rose 5.1% while occupancy fell 1.6%; in Edinburgh revenue was up 0.1% but occupancy was down 1.4%; while in Glasgow revenue and occupancy fell 2.6% and 1.3% respectively.
Across Scotland revenue fell 9.5% and occupancy was down 3.0%; in regional UK revenue rose 3.7% while occupancy dropped by 0.8%; in England revenue was up 5.6% and occupancy down 0.6%; while in Wales revenue and occupancy fell 5.1% and 4.1% respectively.
October also saw the city’s occupancy plummet.
BDP partner Alastair Rae, said: “It is clear that Aberdeen hoteliers continue to be battered by the weak oil price and the consequent difficulties this is producing in the wider North East economy.
“Unfortunately there is little sign that will abate and the strain which the hospitality sector is currently experiencing is going to continue until something positive occurs in the oil and gas sector which appears unlikely in the coming months.”
“The large falls in both revenue and occupancy in Aberdeen are also reducing the Scotland wide figures for both as the other cities had a more positive month. Despite falls in occupancy there was a 5.1% rise in revenue in Inverness, an almost static figure of up 0.1% for Edinburgh; and a fall of 2.6% in Glasgow. But, Aberdeen excepted, none of these figures are exceptional and are just part of the seasonal ebb and flow of the hotel market.”
Alastair continued: “There are signs that the hotel sector is experiencing a stable, if unexceptional, year. Occupancy is relatively fixed and revenues are fluctuating slightly but not in a remarkable way.”
“While the wider economy may be shifting toward a gloomier outlook the hospitality industry continues to plough a fairly steady furrow. Interestingly the greatest growth is in the under £50 category indicating that consumers remain cautious in their spending habits. There is a feeling that they are not quite convinced of the strength of the economy at the moment.”
Alastair concluded: “I believe that there will be more of the ‘steady as she goes’ outlook in the hotel market with the obvious exception being Aberdeen. A bit of stability in the sector is to be welcomed as it is easier to financially plan and project when occupancy and revenue remain stable.”
This hotel trends survey has been published since the early 1970s and features a broad range of hotels in the 3-4 star categories.
Recommended for you
