Aberdeen sole bright spot on Scotland’s hotel scene

By DOMINIC JEFF
Published on 25/08/2012 00:00

Scottish hotels are struggling to build up enough financial reserves for the winter as a pick-up in June revenues failed to make up for a poor early season.

Revenues north of the Border were broadly flat compared to last year, outperforming the rest of the UK following several months in which Scotland had fallen behind England and Wales.

Alastair Rae, a partner at PKF, which specialises in the hospitality sector, said: “The worry is that this summer, which has been poor to date, is not picking up enough to compensate for the quiet earlier months of the season.

“The hotel sector relies on substantial revenues for these months to keep it going in the quieter periods. Without this much-needed cash, my concern would be that there will be many hoteliers may not build up adequate financial reserves to sustain them.“

Within Scotland, Aberdeen’s hoteliers continued to enjoy the benefits of the city’s vibrant oil industry, with occupancy up 2 per cent and room yields, the industry measure of revenue, 6.7 per cent higher than last year.

But hotels in Glasgow had to cut prices to achieve a 1.4 per cent increase in occupancy, and yields fell by 4.7 per cent.

Edinburgh’s traditionally strong hotels sector continued to feel the squeeze from the weak euro, which means British holidaymakers are heading abroad while foreigners find visiting the UK more expensive. The capital saw both occupancy and revenue fall by 2.5 per cent and 1.5 per cent respectively.

Rae said the poor weather, recession and continuing financial uncertainty were presenting challenges to the consumer-focused parts of the industry.

“Hospitality, along with retail, is affected by consumer moods and the current feeling is pretty depressed,” he said.

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