Aberdeen pulls down Scottish hotel rates with significant drops in occupancy and revenue

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Scotland was the only part of the UK to experience a fall in both occupancy and revenue during October according to the latest report by accountants and business advisers, BDO LLP.

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

Unfortunately, Aberdeen had the largest fall in occupancy and revenue of anywhere in the UK falling 19.7% to 65.1% and 45.7% to £43.05 respectively. Edinburgh saw occupancy fall 4.5% to 85.2% and revenue was down by 0.8% to £59.81. Occupancy in Inverness fell 3.8% to 86.9% but revenue rose 0.8% to £56.26. Meanwhile Glasgow saw occupancy drop 1.4% to 89.2% but revenue rise 5.8% 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 further evidence that the weakened oil price is substantially dampening demand in the city. The reduced activity in the oil and gas sector 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%. The reduced occupancy figure of 1.4% 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% and by 5.2% to the end of October contrasting with a 14.4% decline in occupancy and an 18.3% fall in revenue in Aberdeen. Edinburgh has had a 2.2% rise in occupancy and a 1.2% rise in revenue to date while Glasgow has had a fall in occupancy of 0.1% and revenue down 1.9% 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.

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