Scots hoteliers outshining UK peers but revenues slide across the board

Trying times: Dalhousie Castle was sold earlier this month. Picture: Julie Bull
Trying times: Dalhousie Castle was sold earlier this month. Picture: Julie Bull
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SCOTLAND’S hoteliers have continued to outperform the broader UK sector, but the overall market saw revenues decline in January amid widespread discounting.

Hotels north of the Border saw revenues dip by an average 1.1 per cent against the same period a year earlier, versus a 4.6 per cent decline for the UK as a whole. However, the monthly survey of three- and four-star hotels from accountancy firm PKF found revenues surging in Aberdeen, where the sector is being fuelled by the booming oil industry.

Inverness also posted a small rise in revenues, although PKF hospitality partner Alastair Rae noted that this was against the lowest 2011 level recorded in any of Scotland’s main cities.

“The oil industry is undoubtedly contributing greatly to the sector’s buoyancy in Aberdeen whilst improved tourism and staycationing will have played its part in Inverness, although the figures were probably also skewed by poor weather in 2011 which will have reduced the previous year’s figures,” Rae said.

The numbers for January – traditionally one of the poorest-performing months in the hotel trade – were a mixed bag as both Edinburgh and Glasgow posted lower average revenues per room rented out. Rae warned of an on-going squeeze within the sector, which is being forced to cut room rates at the same time as lenders shy away from the hospitality industry.

“It is important for the sector to get through the difficult early months of the year in anticipation of greatly improved occupancy and revenue figures later on,” Rae added.

“One key issue for hoteliers at present, which is affecting every-one from international chains to independent sole operators, is the availability of finance. Short-term cash flow difficulties, which can be highlighted by a poor performing month like January, can lead to problems as lenders remain reluctant to fund the sector.”

The five-star Cromlix in Dunblane closed unexpectedly last month after the country house hotel reportedly fell victim to a slump in consumer confidence amid continuing economic uncertainty.

Larger chains such as Von Essen Hotels, former owner of Dalhousie Castle near Edinburgh, have also been affected. Dalhousie was sold to a new owner earlier this month after Von Essen collapsed last year under debts of nearly £300 million.

Using the industry’s standard measure of rooms yield – the number of rooms occupied per night multiplied by the rate charged – Scotland achieved the highest average of £31.86 in January. This compared to a UK figure of £30.57.

Occupancy levels north of the Border rose 4.1 per cent to 57.3 per cent, again putting the Scottish industry ahead of its counterparts in England and Wales.

Occupancy levels in Aberdeen rose 10.9 per cent and were coupled with an 18.7 per cent spike in revenues to an average rooms yield of £44.82. Occupancy in Edinburgh rose 6.2 per cent, but revenues fell 3.7 per cent to an average of £33.77.