Scotland’s hotel sector had a poorer start to the year than any other part of the UK with both occupancy and rooms’ yield (the industry measure of revenue) down year-on-year in January, according to the latest monthly survey by PKF.
The accountant and business adviser’s monthly survey found signs of deep room-price discounting nationwide to maintain occupancy levels. Among Scottish hotels the impact of the recession was exacerbated by the bad weather in January, which had an adverse impact on occupancy and yield.
During January Scotland’s hotels had a 1.5% fall in occupancy while yield was 6.8% lower in Scotland compared with a 4.6% dip in England and 2.2% reduction in Wales.
Occupancy in Glasgow and Edinburgh rose during January by 7.5% and 0.3% respectively, but was down by 7.3% in Aberdeen.
Rooms’ yield fell in all three of Scotland’s major cities: down 13.9% in Aberdeen; 4.1% in Edinburgh; and 1.9% in Glasgow.
Despite the steep fall in Aberdeen, however, average revenue per room in the city was higher than in Edinburgh and Glasgow at £41.63. Edinburgh recorded an average £38.48 and Glasgow £35.23.
The survey also showed an increase in UK occupancy and yield in the budget sector of the market, up 13.9% and 6% respectively during January.
Alastair Rae, a partner in the real-estate and hospitality sector at PKF, said: “These figures indicate that discounting to maintain occupancy levels remains a feature of the sector as the economy creeps from recession. Leaving rooms empty with full capital costs and staffing levels makes no sense so many hoteliers are reducing the cost of their rooms to maintain footfall.”
“Nevertheless, given the situation that we are in, it is inevitable that January is going to produce poor performance figures as it is always one of the most difficult months for the sector.”
Peter Medley, chairman of Aberdeen City and Shire Hotels Association, said: “Times are not as good as they were two years ago. Last year occupancy and rooms’ yield dropped, in particular because oil companies were pushing rates down.
“Edinburgh and Glasgow tend to benefit from more demand for rooms because they are more leisure-orientated cities than Aberdeen.
“It is tough for Aberdeen and we have a lot of work to do to promote the city as a business-tourism and leisure destination.”