ABERDEEN has suffered a sharp fall in airport passenger numbers and steep drops in hotel revenues and occupancy, as the oil and gas sector downturn bites.
These declines underline the challenges facing the Granite City economy, amid widespread cost-cutting by oil and gas companies as a result of lower crude prices. Companies have cut thousands of jobs, as well as reducing pay rates and reining in other expenditure, as they attempt to cope with the lower oil-price environment.
Prior to the plunge in oil prices in the second half of last year, the Aberdeen economy had been a stand-out performer in Scotland. Aberdeen was relatively untouched by the UK's deep recession of 2008/09 and subsequent protracted and stuttering recovery.
Figures published yesterday by Aberdeen International Airport show that passenger numbers totalled 300,871 in May, down by 8.1 per cent on the same month of last year.
The airport highlighted a 13.1 per cent year-on-year decrease in helicopter passenger numbers in May. It said that fixed-wing aircraft traffic in May was down by 7.2 per cent on the same month of 2014.
Carol Benzie, managing director of Aberdeen International Airport, said: "We have seen a reduction in traffic across all three sectors, helicopters, international and domestic, last month due to the impact of the cost efficiencies currently being driven throughout the oil and gas sector."
The fall in passenger numbers at Aberdeen International Airport contrasted with sharp year-on-year rises in traffic at Glasgow and Edinburgh.
A separate survey published yesterday by accountancy firm BDO shows that the Aberdeen hotel sector has experienced steep year-on-year declines in occupancy and revenues.
The occupancy rate for Aberdeen hotels was 68.9 per cent in April, down from 77.9 per cent in the same month of last year.
Revenue per available room for Aberdeen hotels came in at £62.99 in April, having been £71.66 in the same month of last year, according to the survey of three and four-star properties. This key measure is calculated by multiplying occupancy by the average room rate achieved.
In contrast to Aberdeen, the hotel sectors in Edinburgh, Glasgow and Inverness all achieved sharp year-on-year rises in revenue per available room in April.
BDO partner Alastair Rae said: "The continued uncertainty in the oil and gas sector is still having a serious impact on the hotel sector in Aberdeen...Drops in both occupancy and revenue, at a time when the rest of the sector in Scotland experienced a double-digit [percentage] increase in revenue, indicates that the fall is specific to the oil industry."
He added: ""It should be noted that occupancy and revenue levels in Aberdeen are falling from the very high levels achieved last year but it is clear that this is becoming part of a trend in the Granite City, which needs to react immediately by monitoring costs, cutting expenses where possible, and keeping prices competitive."
Glasgow Airport said it had achieved its busiest May in seven years with passenger numbers totalling 785,063, up by 13.3 per cent on the same month of last year. It recorded a 17 per cent year-on-year rise in international passenger traffic, with Thomas Cook and WestJet transatlantic flights and Barrhead Travel charter services among those boosting traffic. Domestic passenger numbers in May were up by 9.1 per cent on the same month of last year.
Edinburgh Airport enjoyed its busiest May on record, with a total of 1.024 million passengers. This was up 9.3 per cent on the same month of 2014.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article