Scottish hotel sector on mend as rates outpace UK

Edinburgh benefited from a substantial upturn in both tourist and business visitor numbers. Picture: PA

Edinburgh benefited from a substantial upturn in both tourist and business visitor numbers. Picture: PA

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SCOTLAND’S hotel industry appears to be returning to form after an extended period of difficulties, with the sector clocking up higher occupancy and revenue levels during May than anywhere else across the UK.

Aberdeen continued to shine, driven by buoyancy in the oil and gas sector, while Edinburgh benefited from a substantial upturn in both tourist and business visitor numbers.

However, activity in Glasgow and Inverness was more subdued. Overall, yesterday’s monthly survey from accountancy firm BDO recorded a 10.6 per cent rise in average Scottish room revenue during May, well above the figures for “regional UK”, England and Wales.

Occupancy levels also outstripped those in the rest of the UK.

Alastair Rae, a partner in the property, leisure and hospitality sector at BDO, said the figures showed “just how well” Aberdeen’s hotel sector is performing, with revenue of £77.02 the highest in the UK outside London.

Edinburgh also experienced a considerable upturn during May with occupancy of 85.3 per cent – second highest in the UK after Portsmouth – and revenue of £74.23, the second strongest outcome in the UK after Aberdeen.

The Scottish capital’s performance was enhanced both by increased tourist numbers and an upturn in business visitors for some high-profile events including the IID International Dermatology Conference.

Revenues in Inverness and Glasgow rose at a more subdued pace to £48.72 and £48.21 respectively. Occupancy levels remained strong but relatively static at 84.7 per cent in Inverness and 80.6 per cent in Glasgow.

Rae said Inverness should benefit from the start of the tourism season, but Glasgow typically relied less on this. Its fortunes will be mainly determined by the city’s ability to attract high-volume conference and event work.

The May findings contrast with surveys from earlier in the year, when Scotland’s hotel sector was described as “treading water”. While Aberdeen has performed well on all measures, occupancy and revenue levels in other parts of the country have struggled.

“These figures are quite positive and indicate a return to form for the Scottish hotel sector which has been going through a difficult period,” Rae said. “However, this needs to be sustained over the summer for full confidence to return.”

Compared to Scotland’s 10.6 per cent increase in May, hotel revenues rose 7.6 per cent in Wales, 3.9 per cent in regional UK and 2.5 per cent in England. The month also saw sharp increases in occupancy and revenues in the market for rooms charged at £40 or less, with hikes of 15.2 per cent and 11.4 per cent respectively.

“This may be indicative of individuals returning to the budget hotel market and is, perhaps, a sign of a slight increase in financial confidence,” Rae noted.

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