The monthly LJ Forecaster Scottish Intercity Report, from tourism market research specialists LJ Research, shows market growth in Edinburgh, occupancy increase in Glasgow and sustained losses in Aberdeen.
Edinburgh
Edinburgh’s August festival season which includes the Fringe – the world’s largest art festival – contributed significantly to generating staggeringly high room occupancy of 93.6% in the city during the month, although this was down slightly by 0.7% compared to last year.
Highlighting the strength of demand for accommodation, on 19 separate occasions during the month hotel occupancy soared to 95% or above.
With domestic and international inbound flights to Edinburgh Airport at record levels coupled with Edinburgh Fringe ticket sales up 5% compared to last year, the (albeit marginal) decline in room occupancy compared to last year may seem somewhat unexpected. Over the past 12 months, however, the city has seen some 1,000 extra hotel bedrooms added to its offer. At the same time, short-term apartment and room-rental service AirBnB saw its number of capital-based listings grow by 86% over the past year. These factors combined illustrate a more competitive market for accommodation providers during this peak month.
Buoyed by strong festival demand, the average room rate (ARR) in the city grew a noteworthy 6.7% from last August to a staggering £161.46. This is the third consecutive month that the city has seen room revenue growth.
Factoring in both occupancy and revenue performance, Revenue Per Available Room (RevPAR) or yield – a key hotel performance metric – was £151.17, up 6.0% compared to last year.
Glasgow
Glasgow’s hotel sector returned its highest August occupancy on record with 93.4% of its rooms sold – an increase of 2% on the previous year. Large scale conferences at the SECC combined with several major events meant city hoteliers achieved 22 nights where occupancy reached 95% or greater.
The cost of a hotel room decreased by 5.4% as ARR fell from £78.99 last August to £74.74 this year. However, this decline is a result of the Commonwealth Games having driven exceptional growth in 2014.
Comparing like-for-like data from those dates in August 2014 when the Games did not take place to the same period this year suggests Glasgow achieved an encouraging overall 3% increase in ARR.
Combining occupancy and revenue figures, Glasgow’s RevPAR stood at £69.79, which although was 3.4% down on 2014 signified impressive double digit growth of 19.4% on August 2013.
Scott Taylor, Chief Executive of Glasgow City Marketing Bureau, said: “Glasgow’s hotel occupancy in August was virtually the same as in Edinburgh, but without the festival, which shows that the city’s tourism demand is year round. Leisure and business tourism are crucial pillars of Glasgow’s economic strategy and August was another mega month for the city, which saw our hoteliers achieve record-breaking occupancy.”
Aberdeen
In Aberdeen, the continued negative trend was again apparent this month as fewer rooms were sold compared to last year — 70.0% compared to 79.3% in August 2014 which constituted a fall of 11.8%.
Hotel revenues experienced another month of double digit reductions (for the fourth consecutive month) as ARR dropped by 13.4% to £78.90. Consequently, RevPAR decreased by 23.6% to £55.21.
As at the start of September – a month which marks the biennial SPE Offshore Europe Conference & Exhibition – business on the books for hotels in Europe’s oil and gas capital were down by over 20% compared to the last time the conference was held in Aberdeen in 2013. The outlook for the next three months does not paint a particularly positive picture with occupancy seven percentage points lower on average compared to the same time last year.
About LJ Research Ltd
LJ Research Ltd is a leading provider of key data and specialised insight to the tourism, travel and hospitality industry. Produced by LJ Research Ltd, the LJ Forecaster produces the most comprehensive set of destination occupancy reports available, providing hotel and destination tourism managers with an up-to-date picture of the total room occupancy and availability in their city based on past and future sales.
For more information click here