Scotland business

'Collapse continues' for Aberdeen hotels

Hotel reception Image copyright Thinkstock

Aberdeen hotels are continuing to suffer from a collapse in occupancy levels and revenues, according to a report.

Business advisers BDO found occupancy in the Granite City fell year-on-year by 15.6% in February, while revenue slumped by 39.4%.

BDO said Aberdeen's hospitality sector continued to be "adversely affected" by the low oil price.

There was a mixed picture for hotels in other Scottish cities.

In Edinburgh, year-on-year occupancy rose 2.4% and revenue was up 3.5%.

Glasgow saw occupancy dip 0.9%, with rooms yield up by 5.6%. Year-on-year occupancy in Inverness was down 2.5% and revenue up 0.5%.

Occupancy rates across the UK were static, while revenue was up in Wales, regional UK and England but down in Scotland.

'Significant impact'

Alastair Rae, from BDO in Scotland, said: "Aberdeen's hospitality sector continues to be adversely affected by the low oil price which is clearly having a significant impact on occupancy and revenue levels.

"With occupancy dipping to 60.7% there will be a concern that revenues will continue to fall as demand remains as limited.

"There will be a cut-off point for many operators where they find the balance between occupancy and revenue is simply not working.

"However, for many others this will simply be a continuing challenge for them to manage.

"However, until a clear picture emerges of where the oil price is going to stabilise the hospitality sector in Aberdeen is going to continue to be hit in the months to come."

He added: "While February is traditionally quite a flat month for the hotel sector it is good news that both Edinburgh and Glasgow posted good increases in revenue, indicating a relatively strong performance in Scotland's two largest cities."

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