Aberdeen’s hotel sector woes continue while Edinburgh tops the UK

BDOAberdeen’s hotel sector experienced its fifth consecutive month of double digit drops in occupancy and revenue in August as the hospitality sector continued to be badly hit by cuts in the oil and gas sector, according to the latest report by accountants BDO.

The firm’s monthly hotel survey found that year-on-year occupancy in Aberdeen dropped 12.2 per cent to 71.0% whilst rooms yield (the industry term for revenue) fell 22.7 per cent to £51.30.

In contrast, Edinburgh had, at £99.35, the highest revenue figure of anywhere in the UK including London with the exception of luxury international hotels in the UK capital.

Inverness had the third highest revenue outside London at £76.58 just behind Bath. Meanwhile Glasgow’s hospitality sector saw a slight rise in revenue of 1.8 per cent to £61.87. Aberdeen aside Scotland’s three other cities all had near identical occupancy rates of around 90.0 per cent.



The dip in Aberdeen’s fortunes continues to bring down the Scotland-wide revenue figure. Revenue in regional UK was up 5.3 per cent; rose 7.0 per cent in England; up 0.3 per cent in Wales; but down 1.8 per cent in Scotland. However, the overall revenue figure of £71.62 was considerably higher than any other part of the UK but this was down to very strong numbers in Edinburgh, Inverness and, to a lesser degree, in Glasgow.

Alastair Rae
Alastair Rae

Alastair Rae, a partner in the Property, Leisure and Hospitality sector at BDO, said: “Although Aberdeen continues to have the greatest fall in occupancy and revenue levels there may be some consolation in the fact that the rate of decline appears to be slowing. The occupancy fall was only just in double figures and once that stabilises prices will hopefully firm up a bit. Until then, however, the sector remains vulnerable.”

“There is also a danger that the fortunes of Aberdeen may be overshadowing what has been an excellent summer for Edinburgh and Inverness. Glasgow has also performed extremely well but their market in more business and conference based and therefore potentially quieter in the summer months when leisure activity takes over.”

Alastair added: “Edinburgh in August is, of course, renowned for being busy but over 90% occupancy coupled with nearly £100 revenue per room is an extraordinary performance. It is clear the city was full of festival goers and the hospitality sector benefited accordingly.”

“The numbers for Inverness continue to grow and are a clear sign that a combination of staycationers and overseas visitors is proving highly profitable for the Highland capital’s hospitality sector.”

Mr Rae concluded: “These figures are remarkable for many reasons not least the extremes of performance. Edinburgh and Inverness are at the top of the tree in the UK whilst Aberdeen continues to be in the doldrums albeit for understandable reasons. Aberdeen aside this looks like being a bumper year for the hospitality sector in Scotland as confidence in the leisure market returns and hoteliers can reap some well deserved rewards after many lean years.”

This hotel trends survey has been published since the early 1970s and features a broad range of hotels in the 3 – 4 star categories.

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