Buoyant but varied year for hotels in Scotland

SCOTLAND’S hospitality sector is “having a good year” but Aberdeen needs to attract hotel customers from outside the oil and gas industry to minimise its falling revenues and occupancy, according to new data.

Edinburgh and Inverness were the strongest city performers outside London. Picture: Ian Rutherford

The monthly survey by accountancy firm BDO, published yesterday, found that Aberdeen experienced its fourth consecutive month of double-digit drops in occupancy and revenue in July.

Revenue, or rooms yield, fell by 33.6 per cent to £52.34, marking its lowest level since July 2011 when it dropped to £50. Turning to occupancy in the Granite City, this dropped by 21.8 per cent year on year to 63.6 per cent.

The figures for Glasgow were compared to its “outstanding” July 2014 when it hosted the Commonwealth Games, and its hotels experienced a year-on-year drop in occupancy of 3 per cent, while revenue dropped by 22.3 per cent.

The news was more positive for Edinburgh, up by 12 per cent to £78.25, and Inverness where yield jumped by 10.5 per cent to £83.37. Consequently these cities were the UK’s top two performers outside London.

The contrasting performance of Scotland’s cities led to overall occupancy falling by 4.4 per cent compared with an increase of 0.2 per cent in regional UK, and up by 0.5 per cent in England and 4.3 per cent in Wales. Revenue was down by 9.1 per cent in Scotland compared to growing by 5.5 per cent in regional UK, 6.6 per cent in England and by 20.2 per cent in Wales.

Alastair Rae, BDO partner in the property, leisure and hospitality sector, said Inverness, Edinburgh and Glasgow all had an “excellent July”. Looking at the Scottish capital specifically, he said it is “the steamroller of tourist destinations driving forward with increased momentum”.

However, he acknowledged that. in Aberdeen, the oil and gas sector’s troubles are continuing to weigh on its hospitality sector. “Unfortunately there is little sign of this ending until the oil price rises and the future of the sector becomes clearer,” he said.

Rae added that years of increased costs since July 2011 have meant that “the impact on the bottom line is more severe this time around”.

He said: “For hoteliers in the Granite City there is little option but to batten down the hatches, keep an eye on costs and margins, and try to draw in business and leisure visitors unrelated to oil and gas over the next few months and years. Unfortunately I think the situation in Aberdeen will persist and that the hotel sector needs to try to diversify its customer base in future to cope with the declining numbers.”