Edinburgh and Inverness lead Scottish hotel performance

Scotland’s hospitality sector was led by strong performances by Edinburgh and Inverness during the traditional slow opening to 2016, according to the latest report by accountants and business advisers, BDO.

The firm’s hotel survey found that occupancy and revenue in Edinburgh rose by 16.2 per cent and 36.2 per cent respectively during January. In Inverness the increase in occupancy was 10.4 per cent and revenue rose 13.3 per cent.

Meanwhile, Glasgow experienced a rise of 1.8 per cent in occupancy and 8.3 per cent in revenue. However, the continued travails of the oil industry continued to impact upon the hotel sector with Aberdeen recording a fall of 16.2 per cent in occupancy and of 43.4 per cent in revenue.

Overall the performance of the hospitality sector in Scotland during January was comparable to the rest of the UK with regional UK posting occupancy of 62.7 per cent and revenue of £34.59; England had occupancy of 62.9 per cent and revenue of £34.58; Scotland had occupancy of 62.7 per cent and revenue at £32.94; while Wales had occupancy and revenue of 57.9 per cent and £27.58 respectively.

Alastair Rae, head of BDO’s audit practice in Scotland, said: “This was an excellent start to the year for Edinburgh and Inverness indicating that the tourism market is getting stronger. Certainly Edinburgh’s claims to be a year round tourist destination seems justifiable given these figures in January which is traditionally one of the quietest months of the year.”

“Glasgow also posted good revenue growth during January indicating a strong event and conference market. It is clear that the development of the Hydro has been an extraordinary success for the city bringing in large numbers of people at all times of the year.”

Mr Rae continued: “Aberdeen continues to suffer and, although there are signs of the oil price stabilising, it is apparent that the hospitality sector remains under strain due to the dramatic reduction in business travel. I don’t believe this will pick up in the immediate future but, perhaps in a year or so, there may be something of a return to fortune for the market in Aberdeen.”

Mr Rae concluded: “The hospitality sector is strongly affected by economic uncertainty and until the referendum is resolved and the outcome of the financial recovery in Scotland is clear I suspect we will see more fluctuating performances for Scotland’s hotel operators. However, Scotland’s hoteliers have shown themselves to be resilient in coping with the last few years and I believe they will continue to operate in the most efficient and profitable way possible.”

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