The monthly LJ Forecaster Scottish Intercity Report, from tourism market research specialists LJ Research, tracking city centre hotel performance showed another month of occupancy growth in Scotland’s major cities coupled with room rate increases in Glasgow and, in particular, Edinburgh but continued decline in Aberdeen.
Occupancy was highest in Edinburgh, where hoteliers sold 82.3% of their hotel rooms. This was 2.4 percentage points higher than in December 2015. Complementing this positive occupancy growth was a staggering 20.7% increase in room rates which resulted in an Average Room Rate (ARR) of £113.48. This was the 13th consecutive month of rate growth within Edinburgh.
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Overall, these figures showed very strong growth of 23.6% for Revenue Per Available Room (RevPAR) – the key hotel performance metric – in Scotland’s capital as RevPAR stood at £93.40.
The trend of future bookings also shows positive signs for Edinburgh hoteliers as forward bookings for each of the next 6 months were all 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. This marked a 4.5% increase from last year.
Room rates in Scotland’s largest city grew 4.7% as an ARR of £69.96 was recorded. Combining the occupancy and ARR performance, RevPAR outperformed last year substantially, growing by 8.8% to £51.86.
In addition to the occupancy growth, there was an increase in business-on-the-books in Glasgow as confirmed and tentative bookings were above last year for four out of the next six months.
Over half of Aberdeen’s hotel rooms (53.0%) were booked in December 2016 which marked a positive, albeit modest, 2.6% increase from last year.
Average room rates however, performed differently, declining by 14.9% as ARR of £61.35 was achieved. Consequentially, RevPAR decreased by 12.7% to £32.50.
In Aberdeen, overall business-on-the-books indicates a slightly more optimistic outlook compared to last year, hinting at a possible continuation of modest occupancy increases in the months to come.
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. “
“Whilst lower ARR growth was recorded in Glasgow compared to Edinburgh, the 4.5% growth in room occupancy in Glasgow is very positive. Indeed compared to two years ago, occupancy in Glasgow in December has increased by over 7%.”
“As for Aberdeen, it will be interesting to monitor how the hotel market responds in the coming months as the price of oil continues to rebound.”
John Donnelly, Chief Executive of Marketing Edinburgh said:
“2016 overall was an incredibly positive year for Edinburgh’s hospitality sector, which has now seen 13 months of consecutive rate growth in occupancy. Edinburgh’s Christmas and Hogmanay celebrations attracted visitors from over 64 counties and entertained more than 4 million people from UK and abroad. The substantial 20.7% rise in room rates for December is a testament to growing popularity of Edinburgh as a world class destination.”
Councillor Frank McAveety, Leader of Glasgow City Council and Chair of Glasgow City Marketing Bureau said:
“At 74.5%, Glasgow’s average December occupancy was the highest it’s ever been for the festive period, with levels reaching greater than 90% on 10 separate nights; returning healthy yields for our hoteliers and reinforcing the visitor appeal of our Glasgow Loves Christmas campaign and unrivalled shopping.
“The city was jam-packed during December with some 26 conferences bringing nearly 4,000 conference delegates and major events, such as the Old Firm derby and Rod Stewart’s performances at the SSE Hydro, delivering considerable audiences. A near 5% rise in room rate is particularly pleasing against a backdrop of increasing supply, while increased future bookings over the next six months reflects our ongoing demand and is a step in the right direction to delivering our new Tourism and Visitor Plan ambition of growing overnight visits from two to three million by 2023.”
Steve Harris, chief executive of VisitAberdeenshire, said:
“Hotel occupancy levels across Aberdeen are up, and that can only be a good thing for the city. Hoteliers have persevered through a challenging few months, so to hear that they are reporting a more positive outlook for the coming months is encouraging.
“December is traditionally a month when we see an increase in leisure visitors travelling to Aberdeen and Aberdeenshire to take advantage of our excellent shopping facilities and Winter Festival. As we progress through the year, several high profile corporate events – including SPE Offshore Europe – will be held in the city, and we look forward to welcoming additional business tourists to the region.”