Aberdeen hotel market ‘shows signs of stabilising’

Aberdeen today. Picture: Ian Rutherford
Aberdeen today. Picture: Ian Rutherford
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Hotels in Edinburgh and Glasgow checked in with further growth last month, and while the sector in Aberdeen continued to struggle there were some positive signs for the city, according to a new industry report.

The monthly LJ Forecaster Scottish Intercity Report, from tourism market research firm LJ Research, found that Edinburgh and Glasgow achieved their fourth consecutive monthly average room rate (ARR) increases, of 10.8 per cent and 7.8 per cent respectively.

Hoteliers there outperformed recent months’ growth with the average cost of a hotel room during March reaching £92.12 and £74.29 respectively. Overall there was positive growth for the two cities in the first quarter of this year.

However, the picture was very different for Aberdeen, which experienced its sixth month in a row of double-digit ARR decline, with a year-on-year drop of 27 per cent resulting in an ARR of £68.55.

READ MORE: Aberdeen’s hotel sector hit by oil industry slump

LJ Research also found that hotels in all three Scottish cities saw year-on-year drops in forward bookings for the next three months. Aberdeen saw the smallest fall at 0.4 per cent, “indicating a note of optimism for some potential stabilisation in the market,” while the reductions for Edinburgh and Glasgow were 5.5 per cent and 2.6 per cent respectively.

Sean Morgan, managing director at LJ Research, said: “It’s notable to report a slowing decline in future bookings for Aberdeen hotels this month. Indeed, there’s evidence of greater accommodation demand beyond May compared to last year.

“Ongoing market adjustments to the price of oil will do much to convert, or otherwise, these signs of recovery over the next few months.”