Occupancy and revenue fall in Scottish hotels during March

Occupancy and revenue fell in Scottish hotels during March compared to the rest of the UK according to the latest report by accountants and business advisers PKF. The firm’s monthly hotel survey found that occupancy in Scotland fell by 0.1% during March (when Scotland had the lowest occupancy figure of 66.6% of any part of the UK) compared with an increase of 2.7% in regional UK; up 1.3% in England; and up 7.4% in Wales. Rooms yield (the industry measure of revenue) in Scotland fell by 0.7% to £42.14 during March; in regional UK revenue rose by 0.8% to £41.15; was down 0.5% to £41.13 in England; and up 10.3% to £42.88 in Wales.
Aberdeen continues to outperform the rest of Scotland’s cities with an increase in occupancy of 0.1% to 75.8% at the same time that revenues rose by 7.4% to £58.74. Glasgow also fared well during March with an increase in revenue of 4.6% to £45.99 despite a fall in occupancy of 1.9%. Unusually Edinburgh recorded a drop of 3.9% to 66.4% at the same time that revenue fell by 8.9% to £43.66. Inverness increased occupancy by 8.5% to 69.2% but revenue fell by 0.4% to £24.96.
Alastair Rae, a partner in the Real Estate and Hospitality sector at PKF, said, “These figures reveal the fragility experienced in the Scottish hotel sector with falls in occupancy and rooms yield against the UK wide trend of an increase in both. Occupancy is the lowest among the four UK regions whilst revenue, which is usually higher overall in Scotland, is now on a par with the rest of Britain.”
“It is clear that the sector in Aberdeen continues to thrive with improving occupancy at the same time that revenue is increasing. Glasgow is performing well with a strong increase in revenue which is likely to have caused the small decrease in occupancy.”
Alastair continued, “In contrast, Edinburgh has seen a marked drop in occupancy (at 66.4% this makes it the lowest among Scotland’s main cities) coupled with a substantial drop in revenue to £43.66 during March. This indicates that even dropping room prices has not helped maintain occupancy in Scotland’s capital.”
“Whilst a single month is never an indication of a trend it is notable that Edinburgh’s occupancy and revenue numbers should both have dropped during March. Given that Edinburgh City Council is once again considering a bed tax on hotels in the capital it should be noted that the sector remains fragile and is prone to performance fluctuations and rising costs. Therefore, a further charge on tourism in Edinburgh is at best ill considered, and at worst potentially harmful to the future of the sector. The Council need to realise that imposing a tax on an empty room will not raise much revenue.”
Alastair concluded, “It would be unwise to read too much into one month’s figures but it is clear that the sector continues to face considerable instability, mirroring the uncertainties in the wider economy. There is no reason to assume that 2012 will be a great year for Scottish hotels at this stage.”
PKF’s hotel trends surveys have been published since the early 1970s and features a broad range of hotels in the 3 – 4 star categories.

Category: News
Tags: dram, Hotel, Occupancy, SCOTLAND