Aberdeen City and Shire Hotels’ Association (ACSHA) is remaining upbeat about the performance of the sector, despite a decline in occupancy rates last month.
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Figures released by hospitality research company STR Global shows that occupancy fell by 8% to 70% between January and February, and by 2.6% overall in the 12 months from February 2014.
In comparison, however, the average daily room rate dropped by 2.9% to £94.85, while the number of bedrooms available over 12 months increased by 4.6% due to new building projects. Over 1,000 additional hotel rooms have been created in Aberdeen since 2013, with two further major hotel openings planned for sites at Aberdeen International Airport later this year.
ACSHA chairman Chris McGuinness believes that, in addition to the increased number of bedrooms, falling oil prices will also have influenced the February figures. He says that members of the trade organisation are taking a measured approach to the slump in the energy sector.
He adds, “There are a lot of very experienced operators in the city who have witnessed the cyclical nature of the energy sector over many years. We know only too well that the oil industry has peaks and troughs: the sector has enjoyed a phenomenal performance over the past couple of years, so the current downturn has not been unexpected.
“We expect to see a reduction in the amount of discretionary business travel as a result of the downturn, with less people traveling into the city for meetings and training courses. However, we are not panicking by entering into a rates war as previous experience tells us that this will not be a long-term issue.
“The current decline will not last forever, and as global demand for oil starts to increase so too will the price of Brent crude oil. When that happens, Aberdeen’s hotel industry will be in a stronger position than before with more bedroom availability for those visiting the city on business.
“For many years we have found ourselves in a situation where we did not have enough supply to meet demand. That should now start to balance out and the gap in performance between Aberdeen and rest of the UK – which has previously been far too big – will get closer.”
ACSHA has worked closely with destination management group VisitAberdeen to market the city for weekend breaks, and will continue to in efforts to help position Aberdeen as a leisure destination.
Mr McGuinness adds, “The high demand for bedrooms midweek means that Aberdeen has some of the best value weekend rates anywhere in the world. Supporting VisitAberdeen continues to be a priority for ACSHA.
“We must not forget that there is more to the hospitality industry than bedrooms, and anecdotally members are telling us that revenue from food and beverage sales is rising year on year and meetings and events, which includes weddings, is also performing at the level it has in previous years.”
Aberdeen City and Shire Hotels’ Association represents 43 independently operated hotels and conference venues. These hotels provide around 4,100 bedrooms in Aberdeen and Aberdeenshire. ACSHA is committed to improving the quality and standard of hotel services and to furthering the overall standards of excellence and hospitality within the region.