Economy

Aberdeen room rates continue to fall despite occupancy growth

Average room rates (ARR) and revenue per available room (RevPAR) continued to fall in Aberdeen, despite increases in occupancy.

The latest monthly LJ Forecaster Scottish Intercity Report, from market research firm LJ Research found over half of Aberdeen’s hotel rooms (53%) were booked in December, which marked a 2.6% year increase on December 2015.

Despite this, average room rates declined by 14.9% to £61.35 and RevPAR decreased by 12.7% to £32.50.

Overall business-on-the-books in the city indicates a “slightly more optimistic” outlook compared with last year, with LJ Research claiming this could hint at a possible continuation of modest occupancy increases in the months to come.

Meanwhile, occupancy was highest in Edinburgh where hoteliers sold 82.3% of their hotel rooms – 2.4% higher than December 2015.

Average room rates increased 20.7% to £113.48 – the 13th consecutive month of rate growth in the city – and RevPAR was up 23.6% to £93.40. Forward bookings for each of the next six months are also above last year’s levels.

Glasgow’s hoteliers achieved the highest year-on-year occupancy increase of all three cities, selling 74.5% of their room stock in December 2016 – a 4.5% increase from the preceding year.

Average room rates in the city were up 4.7% to £69.96, while RevPAR increased 8.8% to £51.86.

Sean Morgan, managing director at LJ Research, said: “The year has ended generally favourably for hoteliers across the key cities in Scotland. In Edinburgh, in particular, there was much festive cheer as double digit RevPAR growth – and healthy double-digit growth at that – was recorded for the fifth consecutive month.

“No doubt festive winter events contributed to drive demand in all three cities and, overall, it appears that these events benefitted Scotland’s two largest cities the most.”

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