- Hotel Market Research
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The monthly LJ Forecaster Scottish Intercity Report, from tourism market research specialists LJ Research, tracking city centre hotel performance showed exceptional trading performance in Edinburgh and challenging conditions in Glasgow and, in particular, Aberdeen for September 2016.
In Scotland’s capital, hoteliers sold on average 94.0% of their rooms during the month. Highlighting strong demand for accommodation in the city, this high level of occupancy was 2.4% above last year and the highest on record for LJ Forecaster – a system which has tracked hotel performance for over 10 years.
In addition to increasing room occupancy, hoteliers also successfully grew room rates in Edinburgh as the Average Room Rate (ARR) increased from £111.53 in September 2015 to £129.09, an increase of 15.7%.
Overall, these figures showed strong growth of 17.9% for Revenue Per Available Room (RevPAR) – a key hotel performance metric – as RevPAR stood at £120.66 this year compared to £102.38 last year.
The trend of future bookings also shows positive signs for Edinburgh hoteliers as forward bookings for October, November and December were all above last year and 2014 levels.
In Glasgow, however, there was evidence of shrinking occupancy and shrinking ARR during the month. Average room occupancy for Glasgow hoteliers was 88.2% (compared to 91.5% last year) and ARR stood at £75.09 (compared to £82.22). Factoring in both occupancy and revenue performance, RevPAR was £66.04 which was 12.4% below last year and 17.7% below the Ryder Cup month of September 2014.
Following four months of room occupancy growth, September performance for hoteliers in the Granite City was negatively impacted by the biennial oil and gas event – Offshore Europe – which took place last September. The absence of the conference this year along with continuing oil and gas sector challenges contributed to generate weaker room occupancy and, in particular, rate performance as room occupancy fell by 1.5% to 73.9% and ARR fell by 36.5% to £66.51. Overall, this level of performance generated RevPAR of £49.14 which resulted in a reduction of 37.4% compared to last year and an even steeper contraction of 42.5% compared to September 2014.
Sean Morgan, Managing Director at LJ Research said:
“For the fourth time this year the Edinburgh hotel market recorded double-digit RevPAR growth. Successful strategies to grow room rates has been a key factor in achieving this growth as occupancy rates in the city continue to level out. Meanwhile, in both Glasgow and Aberdeen, the ever changing schedule of leisure and business events along with other market factors contributed to stunt growth. Based on our forward booking analysis, the outlook continues to look challenging in Aberdeen whilst in Glasgow there is evidence of an uptake in demand for the final quarter of the year.”