City hotels strengthened by weak pound as visitors flock

Published on Saturday 6 June 2009 11:34

VISITORS taking advantage of the weak pound have helped provide a welcome boost to the Capital's hotel market, new figures have shown.

New data shows that despite increasing hotel space, occupancy was 6 per cent higher in April than in the same month of 2008.

It is the first year-on-year increase the city has seen since December 2007. And Edinburgh recorded the highest growth of any city in the UK.

A separate report also shows that the amount of money that hotels in Edinburgh make at the weekend is higher than any other city in the UK apart from Glasgow.

City leaders say Edinburgh's strong calendar of events is helping it outperform many other UK cities during the recession.

Many of the Capital's restaurants have also noted growth in the amount of tourist trade they are seeing.

However, it is thought many businesses have achieved the customer levels by dramatically reducing prices – which could hit their profits.

The data from business advisers PKF showed that Edinburgh hotel occupancy stood at 77.2 per cent in April.

Alastair Rae, a partner in the property and hospitality sector at PKF, said: "What this shows is that Edinburgh has retained its strong leisure market despite the economic situation over the last year or so.

"The city is continuing to attract large numbers of tourists, perhaps encouraged by the strength of the dollar and the euro, which is producing an encouraging stability in both occupancy and rooms yield for the hospitality sector."

The Edinburgh rise in occupancy compared to a 10.5 percentage point decline in Aberdeen and an 11.1 point decline in Glasgow.

Edinburgh's figure is also thought to have been helped by it being a popular destination for so-called "staycations", where domestic tourists enjoy a shorter and cheaper break in the UK instead of travelling abroad.

Councillor Tom Buchanan, the city's economic development leader, said: "A range of activities, festivals and events will help cities across the UK do well, particularly as more people are wanting to stay in the UK and take a holiday at home. These people will gravitate to those cities with a healthy and vibrant events calendar."

The separate report from Deloitte also showed that weekend revenues per available room increased by 3.4 per cent to 64 in the year to 20 May. Only Glasgow saw a larger rise in the whole of the UK.

The rise in visitors has softened the blow of the downturn for restaurants.

But Malcolm Duck, chairman of the Edinburgh Restaurateurs' Association and owner of Duck's restaurants in Edinburgh and Aberlady, said:

"There has been a lot of discounting so volume isn't necessarily profit."