Aberdeen hotels hit by North Sea oil pressures

Alastair Rae said oil industry hospitality spending is falling
Alastair Rae said oil industry hospitality spending is falling
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ABERDEEN’S hotels have continued to be hit by the fallout on the North Sea energy industry from the slump in the oil price, recording their third consecutive month of lower occupancies and revenues.

The latest monthly hotels survey by accountant and business adviser BDO found that year‑on‑year occupancy in the Granite City fell 13.4 per cent to 68.5 per cent in June.

Rooms yield – the industry term for revenue – fell 22.1 per cent to £61.32p. This contrasted with strong increases in Glasgow, Inverness and Edinburgh of 21 per cent, 15.6 per cent and 8.9 per cent respectively.

Alastair Rae, a partner in the property, leisure and hospitality sector at BDO, said: “There is little doubt that Aberdeen’s hoteliers are facing a difficult time.

“While the drop in occupancy and revenue comes from a high base last year, there are clear signs that the oil and gas sector is dramatically reducing its costs in the city, with hospitality among the first expenses to be cut.”

Rae said he did not think the outlook for Aberdeen’s hotels would improve in the near term, and urged the sector to address its costs “to cope with the reduced demand and income”.

The report showed that revenue in Edinburgh was the highest in the UK outside London at £86.34, with Windermere in the Lake District and the royal town of Windsor having the next two highest figures.

Rae said that Glasgow’s strong hotels performance in June benefited from a wide range of events and conferences. These included Unison’s national delegate conference, an NHS Scotland event and the European Human Genetics conference.

As a result, Rae said that Glasgow was “reaping the benefit of so many trade visitors”.

The survey also revealed that Inverness had experienced a very strong start to the summer season, with the city now second in Scotland for revenue at £70.30, up 15.6 per cent year on year.

Glasgow had the highest occupancy in Scotland at 91.5 per cent, followed by Edinburgh at 89.1 per cent and Inverness on 87.7 per cent.