Scotland business

Aberdeen hotels 'hit by lower oil price'

Hotel room Image copyright Thinkstock

The lower oil price is continuing to have an impact on Aberdeen's hospitality sector, according to a new report.

Accountants BDO said hotel occupancy rates and revenue fell in the city in March.

Its survey found year-on-year occupancy dropped by 3.2% to 72.4%, while revenue per room fell 5.2% to £66.88.

The fall contrasted with increased occupancy and revenue in Edinburgh, Glasgow and Inverness.

Glasgow had the highest occupancy in March, at 83.5%, with rooms yield up by 11.5% to £51.51.

In Edinburgh, occupancy rose 6.8% to 77.1%, while revenue was up 7.7% to £55.10.

Inverness saw occupancy rise 3.1% to 75.2% and revenue climb by 20.8% to £43.29.

'Slowing of demand'

Alastair Rae, from BDO, said: "It is clear that the reduced oil price is continuing to have an impact on the hospitality sector in Aberdeen.

"A decline in both occupancy and revenue in March reveals a slowing of demand from the business market and a comparable reduction in price occurs to slow the decline.

"How long this lasts in Aberdeen depends strongly on the view of the oil and gas sector about the likelihood of an increase in oil price and the continued viability of the sector in the city.

"I would expect year-on-year occupancy and revenue to continue to fall for some months to come, so hoteliers need to act to ensure they are prepared for lower volumes and values over the next quarter or so."

He added: "Aberdeen aside, the Scottish hotel figures point to a very good year with both leisure and business visitors returning to the market in considerable numbers."

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