Hotels suffer 'challenging' start

Mr Rae said the hotel sector would simply have to "survive the downturn"

Scotland's hotel industry experienced a "challenging" start to 2009 with a fall in occupancy rates, new figures have suggested.

According to accountancy firm PKF's February results, deteriorating economic conditions and poor weather both played their part in the downturn.

However, it said revenue and occupancy levels for Scottish hotels were broadly in line with the rest of the UK.

During February, the revenue generated per room fell by 10.3% in Scotland.

This compared to a decrease of 13.4% across the UK, with Wales seeing an 8% drop and England one of 14.1%.

It is clear that the coming year is likely to be very difficult for the hotel sector Alastair Rae

Occupancy levels in Scotland fell by 5.2% compared to a drop of 7.7% across the UK - 7.9% down in Wales and 8.1% in England.

The revenue generated per room (rooms yield) fell by 10.8% in Edinburgh, 11.1% in Aberdeen and 12.2% in Glasgow.

Occupancy was down 4.1% in Edinburgh, 5.8% in Glasgow and 8.1% in Aberdeen.

PKF also noted the comparatively high rooms yield in Scotland, with Aberdeen - at £61.41 - the highest outside London.

'Attractive incentives'

Alastair Rae, a partner in the hospitality and leisure sector at PKF, said: "The deteriorating economic climate coupled with some severe weather conditions have combined to make the start to 2009 pretty challenging for Scottish hoteliers.

"There is now ample evidence of reduced spending in both the leisure and business markets, resulting in continuing falls in both occupancy and rooms yield.

"This is occurring across the UK and there is no city or region in our survey which has not had a decline in occupancy and rooms yield since the start of the year."

Mr Rae said that despite "slight indications" of recovery in the economy, the sector would simply have to "survive the downturn".

He added: "It is clear that the coming year is likely to be very difficult for the hotel sector, with our early predictions of a difficult 2009 now being widely experienced across all of the hospitality industry.

"Although some character and destination hotels are suffering less, several mainstream operators have had low room rates and some very attractive incentives on offer for the Easter weekend, which indicates that they are wrestling with a fairly subdued market."