Aberdeen hotels recovering as oil price bounces back

Aberdeen’s hotel sector has seen a resurgence of investor demand and new hotel operators as a result of recovering oil prices and major infrastructure projects.

According to real estate advisor Savills the improving outlook for Aberdeen is attracting more investor interest, particularly from overseas, who recognise a window of opportunity to acquire assets at a discount.

Savills suggests Aberdeen will see RevPAR (revenue per available hotel room, year-on-year) move into positive territory in the second half of 2018 for the first time since 2014.

The firm describes RevPAR as hitting ‘rock bottom’ in Q1 2016 as a result of a fall in both average room and occupancy rates that followed the oil crash.

Hotel investment volumes in the city totalled £12.25m in 2017 across three deals, following a year of inactivity in 2016, and Savills suggests this trend will continue to build momentum in 2018.

Steven Fyfe, associate director in the hotels agency at Savills, said: “While there has been a historical dominance and reliance on the oil industry, there are efforts to diversify Aberdeen’s economy and this will prove positive for hotel operational performance over the longer term.”

Back to top button