Hotel prices in Aberdeen soared in March despite a slight decrease in occupancy demand, new figures have shown.
The Granite City maintained its run as the most expensive place to stay outside of London, as hoteliers felt confident they could push up prices without fear of driving away customers, the report from BDO said.
Average revenues – known as rooms yield – rose 11.8% to £69.75 in Aberdeen in March compared to the same month last year.
Yet occupancy fell 0.4% to 74.6%, which was less than Glasgow but above the UK average.
Hotel revenues in Glasgow saw a big increase in the month, rising 21.2%. This saw average rooms yield rise to just £46.75.
The boost in prices in Scotland’s largest city was linked to a 2.4% increase in occupancy, driven by conferences and major leisure events at the Scottish Exhibition and Conference Centre (SECC) and the Hydro arena.
Alastair Rae, a partner in the Property, Leisure and Hospitality sector at BDO said the ability to keep prices high while occupancy was static or slightly lower was “actually a positive sign” for the country.
“It means that hoteliers felt confident enough to charge more without impacting unduly on the number of guests,” he said, adding that prices in Aberdeen would remain steep due to turmoil in Iraq keeping the price of oil high.
“Aberdeen maintains its position as the city with the highest revenue outside London and remains some way ahead of the competition,” he said.
“The oil price, which looks set to remain high given the current situation in Iraq, means that this positive performance is likely to continue through much of this year.”
Occupancy in Inverness fell most strongly in Scotland, down 3.5% to 69.1%. Revenues rose only slightly in the month, up 2% to £29.46.
Overall, Scotland’s occupancy levels rose by the smallest amount compared to other areas, up 1.6% compared to 4.8% in England and 5.9% in Wales.
A recent study by the Aberdeen City and Shire Hotels Association found the sector employed nearly 4,000 people and generated £201.4million in revenue in 2013.
Hotels in the region hosted 1.4million overnight guests, paid £39.3million in wages to staff, spent an estimated £11.3million locally on food and drink and contributed £6.24million in rates to the local authority, it added.
Commenting on the BDO report for hotel occupancy figures in March, Chris McGuinness, chairman of the Aberdeen City and Shire Hotels’ Association, said: “In the 12 months between March 2013 and 2014, two additional hotels were built in Aberdeen creating approximately 300 new bedrooms.
“Although on the face of it occupancy appears to be down, when put into context, occupancy may actually be slightly ahead and at worst is at the same level as March 2013.
“The yield on rooms for March increased by 11.8% which is in line with the rest of England, but it is some way behind Glasgow which increased yield by 21.2%.
“Hotels in the region continue to benefit from the buoyant energy sector to support midweek demand, however, thanks to the work of VisitAberdeen in marketing the area as a leisure destination, many hotels are starting to report an increase in weekend business.
“These figures demonstrate that there is a need for more hotel rooms in the region and as an Association we welcome plans to have a further 700 bedrooms in the city and shire by 2016.
“This indicates that the market continues to be very strong, and attracting investment into the area on this scale can only be a positive thing.”