The opening of a £333 million exhibition centre in Aberdeen will be a “game changer” for the hotels in the north-east, according to an industry chief.
Despite the current “difficult” trading period for hotels in the area, Dr Andrew Martin, vice-chairman of the Aberdeen City and Shire Hotels Association, said they were looking forward to the future.
Two north-east hotels in the past two weeks have faced challenging times and are now looking for new buyers.
It was announced this week the White Horse Inn in Balmedie has been put up for sale after it entered administration, with a buyer being sought. It is still open as usual.
Dr Martin, who is also a lecturer of tourism at Robert Gordon University, said TECA would be important for the industry.
The facility, being built by Aberdeen City Council alongside development partner Henry Boot Developments (HBD) and Robertson Group, is due to open in the summer and replace the current Aberdeen Exhibition and Conference Centre.
He said: “In this year we will see the opening of TECA out near the airport and it is a real game changer in terms of business it will draw to conferences and exhibitions to Aberdeen. We haven’t seen this type of draw before.
“We are also on the verge of mining cruise tourism which will also help the city centre, it will help Aberdeenshire as a brand new market comes to Aberdeen.
“The future is positive, but currently it is really challenging.”
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Dr Martin added: “There are a lot of challenges, we have just come out of an era from 2015 to 2018 where we have seen a huge increase in the supply of hotels.
“There is a lot more openings, places like the Sandman and wonderful new Canadian concept that has brought a couple hundred bedrooms at the old RGU building. We have a lot more supply coming into the market place.
“Since 2015 we have seen a drop in the demand for business tourism, largely on the back on oil and gas having their own challenges. The dollar price coming down meant there was less need for accommodation and this has given a difficult trading environment for hotels.”
He said there was “more competition and less business going around”.
He said: “Another problem, non-domestic rates (NDR), the way it is calculated means there has been a large increase in bills feeding through to the business.
“It makes it difficult for smaller operators like the White Horse Inn and the Highland Hotel.”
Dr Martin said smaller hotels have found it more difficult to attract business due to the bigger offerings but it was good that visitors had a choice.
He added: “For the consumer it is good as we are seeing new entrants coming in, and a number of different price points and value offers across the city and Aberdeenshire. For small independent hotels they can really give a bespoke offering in the town, they give a real local flavour for visitors.
“What they don’t have is access to the smart, sophisticated accommodation with sales and revenue systems. It is harder for them to mine the business that is available. If you are part of a larger company, you have massive leverage behind you and a head office that can make bookings directly.”
Dr Martin said through the work of VisitScotland and VisitAberdeenshire the north-east is now beginning to be viewed as a leisure destination.
Chris Foy, chief executive of VisitAberdeenshire, said: “It is always sad to hear that local businesses have been forced to close their doors.
“With our backing from Aberdeen City Council, Aberdeenshire Council and Opportunity North East, VisitAberdeenshire promotes and helps to develop tourism businesses throughout the north-east, and work closely with Scottish Enterprise to deliver a range of support programmes for local businesses.”
A Scottish Government spokeswoman said: “We have listened to the concerns of the hospitality sector and introduced a real terms 12.5% cap on rates increases for all but the largest hospitality premises.
“We have also listened to the asks of Scottish businesses to deliver a below inflation increase in the poundage in 2019-20 and extended transitional relief for all but the largest hospitality premises across Scotland.
“The budget maintained the most generous package of reliefs in the UK, worth over £750m and ensures over 90% of properties in Scotland, including all small and medium-sized businesses, will pay a lower poundage than they would in other parts of the UK.”
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