The center of the United Kingdom’s energy industry, Aberdeen, on the North Sea on the eastern coast of Scotland, has seen a dip in industry performance in the first half of 2015. However, the market remains strong and one of the U.K.’s most robust markets, according to sources.
Sources said Aberdeen is a two-tier market—city center and airport—that serves domestic and international cities as well as approximately 350 oil and gas platforms.
Kerr Young, director of the hotels and hospitality group in business consultancy JLL’s Edinburgh office, said Aberdeen has seen a noticeable drop off in revenue per available room, but alarm bells aren’t ringing.
“In year-to-date terms, Aberdeen is down some 16% in terms of RevPAR, but average daily rate continues to be high, perhaps second in Scotland behind Edinburgh. What one must remember is that these figures come on the back of strong RevPAR growth over three to four years, so the market shouldn’t be spooked. Aberdeen is still strong,” Young said, adding that another boost to the city in 2015 was “an almost a total absence of bad weather.”
According to data from Hotel News Now’s sister company STR Global, year-to-date June 2015 occupancy declined in the upper-upscale sector by 15.6% to 66.4%, in upscale by 10.7% to 64.1% and in upper-midscale by 11% to 67.7%.
Over all segments for the same period, occupancy fell 11.5% to 67.5%, while average daily rate dropped 7.8% to £89.93 ($140.39) and revenue per available room decreased 18.4% to £60.67 ($94.71). In 2014, Aberdeen saw a year-on-year RevPAR increase of 7.2%.
Sources said that to counter performance dips, Aberdeen has diversified into renewable energies and tech and supply chain logistics, and research and development.
Young explained that Aberdeen is the world leader in subsea engineering, and decommissioning retired oil and gas platforms is a multibillion-dollar industry.
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