Scotland business

Oil slump hits Aberdeen hotel occupancy

Hotel reception Image copyright Thinkstock

Aberdeen hotels have suffered a 46% one-year drop in revenue per room, as the oil industry downturn has seen business spending cut.

It was the worst performing part of the UK last October, according to a regular survey of 3 and 4 star hotels by accountants BDO.

Scotland was the only part of the UK to see a fall in both occupancy rates and in revenue in the year to last autumn.

Occupancy across Scottish cities fell 5.6% to 81% of capacity.

Revenue was down 9.5% to average revenue per room of £51.73.

Revenue per room rose 10% in England and by 42% in Wales, though both had averages below that of Scotland.

Aberdeen hotels faced a fall in occupancy of 20% since October 2014, to 65%, and revenue was down 46% to £43.05.

Taking the evidence for January to October, Aberdeen occupancy was down 14%, and revenue by 18%. The bigger fall for October indicates an acceleration of the hotel sector's problems during autumn.

'Dented confidence'

Edinburgh hotel occupancy in October fell 5% compared with the previous year, to 85%, and revenue by less than 1%.

Both Glasgow and Inverness saw occupancy drop slightly, but revenue per room rose.

Alastair Rae, a partner at BDO and specialist in the hospitality sector, said that, apart from Aberdeen, the decline was not a cause for concern.

He said the drop in oil company activity has been "substantially dampening demand in the city".

"The fall in occupancy and revenue in Edinburgh is perhaps an early indication of consumer confidence being slightly dented in the autumn and a small reduction in leisure activity," he added.

"Inverness continued to have a good year and has the best occupancy and revenue to date figures for 2015 of any of Scotland's main cities."

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