Leaner times for hotels but Scotland outperforms UK
10 Nov 08
According to the latest monthly survey by PKF, rooms yield – the key industry measure of revenue – in Scotland’s hotels fell by 6.1 per cent in September against a UK fall of 3.9 per cent, a drop of 2.9 per cent in England and a fall of 11.7 per cent in Wales.
Occupancy levels north of the Border fell by 4.7 per cent compared with a fall of 3.3 per cent for the UK as a whole, a drop of 3.2 per cent in England and a fall of 0.9 per cent in Wales.
The survey by PKF showed that all three of Scotland's main cities experienced falls in both occupancy and rooms yield.
Despite being at the heart of the still thriving oil industry, Aberdeen's rooms yield fell by 7.2 per cent. Glasgow's equivalent fell by 6.3 per cent and Edinburgh's by 6.1 per cent. Occupancy levels dropped by 7.5 per cent in Glasgow, by 4.1 per cent in Aberdeen and by 1.4 per cent in Edinburgh.
The one glimmer of hope for the capital was that occupancy remained the highest of anywhere in the UK, while rooms yield is the highest outside London.
According to the survey, there was continued evidence that budget hotels experienced the largest change in the current difficult economic climate.
Since the beginning of the year the budget market, charging under £40 a room, experienced a 7.4 per cent drop in occupancy and a 9.5 per cent fall in rooms yield, which now stands at £19.38. Mid-market revenues remained stable or even increased with both £50-£60 a night and the £60-£80 groups experiencing a rise in rooms yield for the year to date of 6.3 and 3.5 per cent, respectively.
Alastair Rae, a PKF partner specialising in hospitality and leisure, said: "The falls in both occupancy and rooms yield are to be expected, given the continuing difficulties in the wider economy."
He said it was obvious that "discretionary spending has been cut by consumers and corporates" and that it remained to be seen whether the Bank of England's action in slashing interest rates would reverse the trend.
Rae added: "Whilst these figures indicate that the sector has returned to negative growth, occupancy and rooms yield remain at a reasonably high level.
"All three of Scotland's main cities have an occupancy level higher than the UK average.
"There is some way to go and, although clearly affected, the strong growth in the sector over the past two years means hotels are well placed to weather the storm."
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.