MTV Music Awards a bitter sweet success for Glasgow hoteliers
Glasgow hotels saw profits plunge last November compared with the previous year when the city hosted the MTV European Music Awards.
According to HotStats, profits were 17% lower than in November 2014, when the awards fuelled a 35% rise in revenue per available room.
The high-profile awards event is hosted by a different European city each year and generates significant demand for accommodation in the chosen destination, with research suggesting 8,000 hotel room nights were booked locally when Belfast hosted the event in 2011.
"It is therefore not unexpected that the performance of Glasgow hotels this month should pale in comparison to the stand out performance of 12 months ago," said HotStats.
"Despite the decline, at £43.86 for the month, gross operating profit was 20.9% above levels achieved in November 2013 at £36.28, illustrating the extent to which hoteliers have benefited from the elevated profile of Glasgow as a visitor destination in recent years, it said.
"The current strength of demand at Glasgow hotels is further illustrated by revenue per available room for the month of November recorded at £69.17, 21.8% above the levels achieved during the same month in 2013 at £56.78," it said.
In addition to the MTV European Music Awards, Glasgow hosted the Commonwealth Games and Ryder Cup in 2014.
However, in addition to year-on-year decreases in occupancy (-2.0 percentage points) and achieved average room rate (-7.6%) in November, hotels in Glasgow suffered year-on-year declines in revenue in Food & Beverage (-2.3%), Conference & Banqueting (-3.4%) and Minor Operating Departments (-21.1%), which contributed to a 6.9% decline in total revenue per available room. Increases in labour (+1.0%) and overhead costs (+0.7%) contributed to the 17.2% profit decline.
November also marked the first month in which hotels in the southwest recorded a year-on-year decline in profit in 2015 due to rising labour and overhead costs, including cost of sales and sales and marketing expenses, which were both up more than 20%.
However, the 0.8% drop didn’t impact the overall performance for the southwest in 2015, which is expected to hit double figures for the year on the back of a 12.6% rise in 2014.
Rural hotels in the UK saw more than an 11% rise in gross operating profit for the 11 months to November, benefiting from a return to good levels of disposable income fuelling an ongoing recovery in the leisure sector, and the revival of the MICE market.
The residential conference segment rose to 19% of total demand, up from 18.1% during the same period of 2014.
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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