Low oil prices in Aberdeen, popularly known as Scotland’s energy capital, has had a substantial effect on the hotel industry, with a major drop recorded in occupancy and revenues.
According to BDO’s latest hotel trends, year-on-year occupancy in Aberdeen decreased by 17.5%, while the cost per average room fell one-third to £52.45.
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However, revenue in Edinburgh, Glasgow and Inverness increased by 10% in a year-on-year comparison.
The report also highlighted that an increase of 7% was recorded in Edinburgh, which witnessed the highest occupancy rise in May and revenue per room that rose to £75.06.
Occupancy in Glasgow remained static at 86.5%, while the cost of an average room rose to £57.49. The fall in Aberdeen prepared Scotland’s occupancy growth, making it the lowest in the UK.
A slowdown of the North Sea oil sector was attributed to the industry’s recent issues, causing a drop in the volume of property sales in the Aberdeen area, reported Herald Scotland.
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By GlobalDataBDO partner Alastair Rae was quoted saying: "Aberdeen’s hotel sector continues to suffer from the downturn in the oil and gas sector.
"Although the oil price may have stabilised, it is clear that the economy in Aberdeen and the surrounding area is likely to be deflated for some considerable time to come.
"The impact this could have on hospitality is unknown, but likely to be severe so hoteliers and their investors need to examine current and future costs to ensure they are prepared for all eventualities."
