HOTELS in Glasgow and Edinburgh achieved strong year-on-year growth in revenues in March, but the sector in Aberdeen continued to be hit by the oil and gas downturn, a survey has shown.
Accountancy firm BDO’s survey of three and four-star properties showed revenue per available room (revpar) for hotels in Glasgow in March was up by 8.3 per cent on the same month of last year at £52.88. This key industry measure is calculated by multiplying occupancy by average room rate.
The year-on-year rise in Glasgow hotels’ revenues was driven by higher room rates, with occupancy showing a dip to 81.5 per cent from 83.1 per cent in March 2015.
Alastair Rae, head of BDO’s audit practice in Scotland, highlighted a boost to the Glasgow hotel sector in March from concerts and events.
Revpar for Edinburgh hotels in March, at £48.29, was up 12 per cent on the same month of last year.
Mr Rae said: “The early Easter and the Six Nations rugby helped Edinburgh increase revenues from leisure activities.”
Hotels in Aberdeen recorded a 43 per cent year-on-year tumble in revpar to £39.03 in March.
Occupancy in Aberdeen hotels in March was 59.5 per cent, down from 71.8 per cent in the same month of 2015.
Mr Rae said: “For Aberdeen’s hospitality sector, the situation remains very difficult. The considerable drop in revenue remains quite stark. Although Aberdeen’s revenue is falling from a very high figure, a 43 per cent drop is a concern.”
He added: ”Hoteliers need to watch their costs and manage their businesses very carefully in the coming year as the downward pressure on revenue is intense.”
Overall, Inverness hotels recorded revpar of £37.25 in March, up by 0.1 per cent on the same month of last year.
Contemplating the overall picture, Mr Rae said: “The hospitality sector as a whole is very susceptible to negative feelings or uncertain perceptions, and the economy has been jittery since the start of the year. The EU referendum is part of this but equally there are signs that businesses and consumers are concerned that we are not exiting the downturn as rapidly as expected and it may be some time before the UK economy feels positive once more.”
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