ABERDEEN was the only one of 12 UK cities in a hotel sector survey to record a year-on-year decline in revenue per available room in the first quarter.
The survey shows Edinburgh and Glasgow both achieved solid year-on-year rises in revenue per available room (revpar) in the opening three months of this year.
The report, published yesterday by consultancy AlixPartners, hotel market intelligence specialist AM:PM, consulting organisation HVS, and global data benchmarking and analytics provider STR, shows revpar in the Aberdeen hotel sector fell 11 per cent year-on-year in the first quarter.
This is the ninth consecutive quarter in which a year-on-year drop in revpar has been recorded for the Granite City. According to the survey, revpar for the Aberdeen hotel sector is 53 per cent lower than in the first quarter of 2014.
The survey declares that, although some analysts have expressed a belief that oil prices are turning a corner, “they remain turbulent, falling again to below $50 a barrel near the end of April this year”.
And the survey states: “It remains unclear how quickly a resurgence in oil prices and thus the city’s economy will translate into revpar growth for the city’s hoteliers.”
Economists have in recent weeks cited signs that the oil services sector might have come through the worst of the downturn. And surveys have indicated that the outlook for the broader north-east economy, which has been hit hard by the oil sector downturn, might be improving.
Brian Gilvary, finance chief at oil giant BP, declared last week that things boded well for the UK North Sea.
Excluding Aberdeen, there was average year-on-year revpar growth of seven per cent across the other 11 UK cities surveyed. The survey includes Belfast, Liverpool, Birmingham, Cardiff, Bath, Newcastle, Leeds, Manchester and London, as well as Aberdeen, Glasgow and Edinburgh. Revpar is calculated by multiplying the occupancy rate by the average room price.
Belfast’s hotel sector achieved 25 per cent year-on-year growth in revpar in the first quarter. This made the city the top performer for a third consecutive quarter. Hotels in London posted an overall 11 per cent increase, with Liverpool recording a 10 per cent rise.
The Edinburgh hotel sector achieved a seven per cent year-on-year rise in revpar in the first quarter.
The survey states: “Although these results fall below the double-digit [percentage] growth of this quarter’s top performers, this performance is still notable given that it follows six per cent revpar growth recorded in Q1 2016.”
Glasgow's hotel sector posted a four per cent year-on-year rise in revpar in the first quarter.
The survey states: “For some cities, including London, Newcastle, and Glasgow, revpar growth follows disappointing performance in Q1 2016.”
According to the survey, Brexit and political uncertainty have caused caution in the hotel transaction market, ‘in line with M&A [merger and acquisition activity] across all sectors”.
Hotel transactions in the first quarter totalled about £500 million, the survey shows. While this marks an improvement from a total of about £300m in the first quarter of last year, transaction values remained well below the £1.5 billion-plus quarterly levels seen in previous years.
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