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Aberdeen leads way amid rising hotel revenues

THE Scottish hotel sector achieved a 10.6% year-on-year hike in revenue in May, more than four times the corresponding 2.5% rise in the English market-place excluding London, as Edinburgh and Aberdeen enjoyed buoyant trading.

CAPITAL GAINS: Edinburgh benefited from higher numbers of tourists visiting the city. Picture: Mark Mainz
CAPITAL GAINS: Edinburgh benefited from higher numbers of tourists visiting the city. Picture: Mark Mainz

This continuing strong performance by the hotel sector in Scotland was revealed in a survey published yesterday by accountancy firm BDO. This survey covers a broad range of three and four-star properties.

Alastair Rae, a BDO partner who covers the property, leisure and hospitality sector, cited a boost for Edinburgh hotels from greater tourist numbers and conference business. He flagged the extent to which Aberdeen hotels were benefiting from the strength of the oil and gas sector.

BDO highlighted a "dramatic" rise in occupancy and revenue in the sub-£40-a-night bracket of the hotel sector in Scotland in May.

Rooms yield, or revenue per available room in the Scottish hotel sector, came in at £58.94 in May, up 10.6% from £53.28 in the same month of last year. This rooms yield figure is calculated by multiplying occupancy by the average room rate achieved

In Aberdeen, revenue per available room in May was up 16% on the same month of 2012 at £77.02. BDO highlighted the fact that this was, again, the highest rooms yield figure achieved anywhere in the UK outside London.

The hotel sector in Edinburgh enjoyed a 19.8% year-on-year rise in rooms yield to £74.23.

In England, excluding London, the hotel sector recorded a 2.5% year-on-year rise in revenue per available room to £44.29 in May. In Wales, there was a 7.6% year-on-year rise to £39.09.

Inverness hotels enjoyed strong trading in May, with a 6.4% year-on-year rise in rooms yield to £48.72.

Glasgow hotels turned in a more subdued performance, with a 0.2% year-on-year rise in revenue per available room to £48.21 in May. However, Mr Rae emphasised that the Glasgow hotel sector's occupancy rate, the ratio of total occupied rooms to total available rooms, had been "strong" in May at more than 80%

Glasgow hotel occupancy of 80.6% in May was up on a rate of 79.9% in the same month last year.

Occupancy in Edinburgh came in at 85.3% in May, up from 79.5% a year earlier. Aberdeen was at 80.9%, up from 79.8% last May. And occupancy in Inverness stood at 84.7% in May, up from 84.2% a year earlier.

Mr Rae said: "These figures indicate just how well the hotel sector is doing in Aberdeen. The oil and gas industry continues to drive high levels of occupancy and, in particular, revenue in the Granite City which, at £77.02, was the highest in the UK outside London.

"Edinburgh also experienced a considerable upturn during May with occupancy of 85.3% – the second-highest in the UK (outside London) after Portsmouth – and revenue of £74.23 which was the second-highest in the UK (outside London) after Aberdeen."

He added: "Edinburgh's performance was enhanced both by increased tourist numbers and an upturn in business visitors for some high-profile conferences.

"Glasgow and Inverness also had strong occupancy levels holding above 80%, while revenue figures also rose. Inverness should benefit from the start of the tourism season but Glasgow typically relies less on this source of income and more on its ability to attract high-quality, high-volume conference and event work."

Occupancy in the sub-£40-a-night bracket in Scotland was 74.3% in May, up from 64.5% a year earlier. Rooms yield in May in this bracket was £25.18, up 11.4% on the same month of last year.

Mr Rae said: "May revealed a dramatic increase in occupancy and revenue for the under-£40 market. This may be indicative of individuals returning to the budget hotel market and is, perhaps, a sign of a slight increase in financial confidence."

He said of the overall survey findings: "These figures... indicate a return to form for the Scottish hotel sector, which has been going through a difficult period. However, this needs to be sustained over the summer."

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