Hotels shrug off price slump
Aberdeen ‘no longer dependent on oil explorers’
Aberdeen’s hotel trade is avoiding the usual downturn caused by a slump in the oil price because the city has become less reliant on the exploration industry.
The growth of other oil-related activities, including research, has reduced its dependency on drilling and this has helped fill the city’s hotel rooms.
Last year the Aberdeen market accelerated past other regional UK cities in terms of total revenue per available room (TrevPAR) as hotel profits leapt 10.3% on the previous year.
The city recently unveiled plans for a new conference centre (left) as a sign of confidence in its ability to attract large number of investors, many from overseas.
However, Joe Stather, hotels intelligence manager EMEA at property agent CBRE, said: “A decade ago we may have seen a much higher impact on hotel performance as a result of falling crude prices as Aberdeen’s economy hinged almost solely on the extraction of oil.
“But the development of wider complementary industries in the interim has attracted a wider array of companies capitalising on the city’s pro-business credentials. This has increased the diversity of demand for hotel rooms and reduced the oil dependent nature of Aberdeen’s economic output.”
He said that within Aberdeen’s oil industry there is potential for this market to expand.
“The decommissioning of the Brent field could take 30 years, pioneering a new sector for which Aberdeen would most likely be the epi-centre. Couple this with the recent reduction in government taxation on North Sea oil, which will likely kindle further exploration, and long-term prospects for the city look bright.”
Picture above: Keppie Design has been appointed as architect on the AECC project