Aberdeen's hotel market 'gets back on its feet'

24-May-2016 - Last updated on 26-Apr-2021 at 17:37 GMT

Aberdeen's hotel market is showing small signs of improvement, says the latest report from LJ Research. Photo: Thinkstock/Colin Hunter

Aberdeen's hotel market, hit heavily by the oil and gas downturn, is showing signs of 'getting back on its feet' as a steadying decline in occupancy levels stabilised last month.

Average hotel occupancy in Aberdeen was 62.6 per cent in April according to data gathered by LJ Research for its monthly LJ Forecaster Scottish Intercity Report, a decline of only 2.5 per cent compared to the same month the previous year.

Despite the decrease and the occupancy figure being nearly 19 per cent below that of two years ago, the data suggests some signs of stabilisation in the market, said LJ Research, which highlighted the fact that forward bookings for the next three months – May to July – are over 3 per cent higher compared to last year.

Steve Harris, chief executive of VisitAberdeenshire, said: “The past few months have been difficult for hoteliers in Aberdeen, but it is promising that occupancy rates across the city now appear to be levelling out. With forward bookings also on the increase, it is a sign that hotel occupancy in Aberdeen is getting back on its feet.

"The oil and gas downturn hit at a time when a number of new hotels were opening. With more rooms available than ever before, and business people choosing to telecommute rather than travelling due to the economic situation, it was expected that occupancy rates would be lower."

Harris said that while business tourism levels had dropped in Aberdeen, the number of leisure visitors to the region had remained consistent.

"New flight routes – including those to the USA via Icelandair – have opened up new possibilities for travellers and those working in the tourism sector are capitalising on this," he said.

Scottish cities

Of all three Scottish cities monitored by LJ Research, Glasgow achieved the highest occupancy with 83 per cent of its rooms sold in April, a rise of 1.6 per cent on the previous year. Average room rate grew by 1.3 per cent to £72.33.

Edinburgh's occupancy fell by 5.7 per cent to 79 per cent although Average room rate rose for the fifth consecutive month to £90.45, up 5 per cent from last year.

Sean Morgan, Managing Director at LJ Research, said: “This month’s analysis shows a mixed picture for hotels in Scotland’s three largest cities. The slowing decline in occupancy in Aberdeen indicates some stabilisation but the continuing decline in room rates are heavily impacting on the sector.

"Following moderate growth in March, Glasgow hotels recorded another successful month in April. Large scale international association conferences and leisure events contributed to successfully drive up both occupancy and ARR for hoteliers during the month.

Despite recording lower occupancy, flat performance was evident overall in Edinburgh. Looking ahead, our forward bookings analysis suggests weaker demand for hotel accommodation. Increasing hotel supply coupled with the growing presence of Airbnb are two factors which may be contributing to this trend.”