Aberdeen hotels suffer '˜stark' slide in revenues

Aberdeen's hotel industry is still 'in the doldrums' amid the backdrop of cutbacks in the North Sea oil industry, but latest figures show a better performance in Glasgow and Edinburgh.

BDO said conditions in Aberdeen's hotel sector remain 'very difficult'. Picture: Ian Rutherford

Accountancy firm BDO said in its latest monthly survey of the sector that there was a 43 per cent year‑on‑year slump in revenues in the Granite City in March.

By contrast, there was revenue growth of 12 per cent in Edinburgh and 8.3 per cent in Glasgow, while Inverness edged up just 0.1 per cent.

Aberdeen’s challenges meant that Scotland was the only part of the UK that saw an overall revenue drop, of 4 per cent.

Hotel occupancy rose 3.4 per cent in Edinburgh in March, but was down 17.1 per cent in Aberdeen, 2 per cent in Glasgow and 1.5 per cent in Inverness. This was amid a drop in occupancies in all parts of the UK, except Wales, of between 1.5 per cent and 1.8 per cent.

Alastair Rae, head of BDO’s audit practice in Scotland, said: “The early Easter and the Six Nations rugby helped Edinburgh increase revenues from leisure activities, while Glasgow benefited from a number of concerts and events during the month.

“For Aberdeen’s hospitality sector the situation remains very difficult. The considerable drop in revenue remains quite stark and is obviously linked to the double-digit decline in occupancy.”

Rae added that hotels would need to manage costs carefully going forward as the downward pressure on revenue was “intense” and unlikely to recover soon.