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Sector hit by North Sea downturn

Oil slump means empty beds in Aberdeen hotels

Aberdeen hotelsLatest figures on hotel visitors reflect the impact of the oil price on the north east economy.

Aberdeen’s hotels experienced their second successive monthly drop of more than 40% in year-on-year revenue, according to the latest report by accountants and business advisers, BDO.

The firm’s monthly regular survey found that during November year-on-year rooms yield in the city fell 42.3% and occupancy was down 11.9%.

By comparison, Inverness saw revenue rise 5.1% while occupancy fell 1.6%. Revenue in Edinburgh was up 0.1% and occupancy down 1.4%; while in Glasgow revenue and occupancy fell 2.6% and 1.3% respectively.

The slump in Aberdeen dragged down the overall figures for Scotland. Revenue fell 9.5% and occupancy was down 3%, while in England revenue was up 5.6% and occupancy down 0.6%. In Wales revenue and occupancy fell 5.1% and 4.1% respectively.

Alastair Rae, a partner in the property, leisure and hospitality sector at BDO, said: “It is clear that Aberdeen hoteliers continue to be battered by the weak oil price and the consequent difficulties this is producing in the wider North East economy.

“Unfortunately, there is little sign that will abate and the strain which the hospitality sector is currently experiencing is going to continue until something positive occurs in the oil and gas sector which appears unlikely in the coming months.

“The large falls in both revenue and occupancy in Aberdeen are also reducing the Scotland wide figures for both, as the other cities had a more positive month.”

He added: “There are signs that the hotel sector is experiencing a stable, if unexceptional, year. Occupancy is relatively fixed and revenues are fluctuating slightly but not in a remarkable way.

“While the wider economy may be shifting toward a gloomier outlook the hospitality industry continues to plough a fairly steady furrow. Interestingly the greatest growth is in the under £50 category indicating that consumers remain cautious in their spending habits. There is a feeling that they are not quite convinced of the strength of the economy at the moment.”

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