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Wednesday, July 17, 2024

Oil sector cutbacks hit hotels

Hotel room revenues fell by 22.4 percent in Stavanger last month. Norway’s oil capital has been experiencing an increase in hotel capacity just as diving oil prices spur cutbacks in the oil business that makes up the hotels’ biggest market.

Newspaper Dagens Næringsliv (DN) reported that hotel room capacity in the Stavanger region has grown by 18 percent in the past year, just when demand is falling. There aren’t enough new guests to fill the new rooms. Hotel occupancy rates fell from 73.2 percent last year to 59.7 percent this year. That’s also led to a reduction in room rates and, thus, a reduction in revenues.

“The Stavanger area is experiencing tougher times, with a large addition of hotel rooms in a market that has turned,” Peter Wiederstrøm of Horwath Consulting, which has crunched the latest numbers in cooperation with Benchmarking Alliance, told DN.

Businesses have also been cutting back on holiday parties that traditionally have been held at local hotels, postponing or cancelling events.”The hotel sector is feeling the effects of that very clearly,” travel director Elisabeth Saupstad told DN. She noted, however, that the hotel industry in Stavanger “has had many fantastic years,” and she thinks the market will eventually turn again.

Hotel occupancy figures for November show Tromsø and Bodø experiencing major growth in their numbers of hotel rooms. Room rates and revenues fell in Tromsø but were stable in Bodø. Norway’s larger cities of Oslo, Bergen and Trondheim reported little if any growth in demand as new rooms came on line, leading to a decline in occupancy as well. Oslo, however, reported that around 70 percent of its available rooms were occupied in November, compared to less than 50 percent in Kristiansund and Lillehammer. Only Drammen reported an increase in occupancy. staff



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