SCOTTISH hotel operators may be forced to merge with rivals after poor weather and the recession continued to weigh on revenues in the peak season.
The latest report by accountancy firm PKF, which conducts a monthly survey of three- and four-star hotels, found that Scotland suffered falls in occupancy levels and revenues during July, with tourist venues such as Edinburgh the worst hit.
Alastair Rae, a partner at PKF, said there could be little doubt that it has been a difficult year for the hospitality sector.
“The weather, coupled with economic and employment uncertainty, has hit both hospitality and retail hard,” he said. “Unfortunately this looks likely to continue, with little sign of improvement in either the weather or the economy.”
Rae said most hotel owners would only fully comprehend their financial position once the summer was over.
He added: “There may be some consolidation within the sector and some difficult decisions to be made if expected revenues fail to materialise by the end of the peak summer season.”
The trend towards lower occupancy levels and revenues was repeated across the UK.
The survey found that occupancy fell 2.8 per cent in Scotland compared to a 4.9 per cent drop in England and a 5.4 per cent slide in Wales.
Rooms yield, the industry measure of revenue, was down 2.1 per cent in Scotland, fell 0.3 per cent in England, but climbed 3.4 per cent in Wales.
PKF said that the Scottish figures were flattered by the data from Aberdeen, as Scotland’s oil capital saw occupancy rise by 11.1 per cent and revenue increase by 21.3 per cent in July.
Edinburgh continued to have a troubled year, with occupancy down 8 per cent and revenue down 10.1 per cent.
In Glasgow, occupancy was down by 1.2 per cent and revenue also decreased by 1.2 per cent, whilst Inverness saw occupancy dip by 2.9 per cent and revenue fall by 6.7 per cent.
Rae said that – although Edinburgh reported substantial falls in both occupancy and revenue during July – the capital normally has among the highest figures in the UK and it remained among the best-performing cities in Britain.
Meanwhile, portable hotel firm Snoozebox provided some hopes for a late summer boost yesterday as it revealed its temporary rooms in Edinburgh enjoyed a 90 per cent occupancy rate during the festivals.
The group opened a 48-room hotel – which arrived on the back of lorries – on the Caltongate development site in the city centre. It said that the cabin-style rooms were almost fully booked, despite a very short marketing lead time.
Snoozebox, which floated in May, made £197,000 in profit in the first six months of the year. The company said that it now has permission to run a 120-room hotel in the Scottish capital for up to 70 days a year.