Page last updated at 18:12 GMT, Monday, 2 March 2009

Hotels 'suffer' most in downturn

Hotel bed
The report indicated that hotels have been hit hard in Scotland

Scottish hotels have been hit harder by economic turmoil than the rest of the UK, a report has suggested.

Occupancy fell by 4.1% on average last year and takings also saw more of a decline than in England and Wales.

The only "bright light" was Aberdeen, which recorded a rise in revenue because of a strong offshore industry.

Edinburgh hotels are the highest priced outside London at 71.90 a night. Business advisers PKF said the sector should be braced for more decline.

Alastair Rae, from PKF, the firm which conducted the research, said: "The impact of the credit crunch increasingly affected the hotel sector during 2008.

"The decline in both occupancy and rooms yield in Scotland has increased in pace toward the year end and looks likely to continue into 2009.

The hospitality industry is facing one of its toughest economic challenges for some time
Alastair Rae

"Reductions in both business and leisure expenditure are now having serious impact on the sector."

The survey showed hotel occupancy fell 4.6% in Aberdeen, 4.2% in Edinburgh and 4.3% in Glasgow.

But Aberdeen was the only Scottish city to increase its revenue - known as rooms yield - which grew by 3.4%.

Revenue fell by 2% in Glasgow and 4.2% in Edinburgh.

Mr Rae said Edinburgh hotels remained the highest priced outside London, and Scotland on average had the highest overall figure at 59.78 a night

In Wales, occupancy fell 2.5% and revenue was down 1.7%. In England, occupancy fell 2.5% and revenue fell 2.1%.

'Toughest challenges'

Mr Rae said: "The hospitality industry is facing one of its toughest economic challenges for some time and it is important that the fundamentals of managing costs, increasing efficiency savings and monitoring profitability remain in place.

"The only bright light at the moment is the improved rooms yield experienced by Aberdeen hoteliers throughout 2008 during a tough trading environment.

"Increasing revenue during the current economic climate reflects how markedly the local economic environment and corporate confidence can make a difference."

He said Aberdeen's oil and gas-based economy has had a successful year compared to Edinburgh's financial services-based community.

"Whether this continues with a fluctuating oil price remains to be seen," he added.

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