Nearly 60 percent of the hotel rooms in Norway’s oil capital of Stavanger were vacant last month. Diving oil prices, cost-cutting in the oil sector and a big increase in hotel capacity were being blamed for the high vacancy rate.
The economic downturn caused by the slowdown in the oil industry continued in full force last month, reports newspaper Dagens Næringsliv (DN). An 18 percent increase in the supply of available hotel rooms came at a time when there was no increase in the number of hotel guests. That in turn led to reductions in room rates and an 18 percent revenue decline in the Stavanger region’s hotel business.
“Stavanger hotels have surfed on the oil wave for many years,” Wenche Salthella of the travel division of employers’ organization NHO told DN. “Now that much of that traffic disappears, hotels need to work harder towards the holiday market instead of the business market.”
Hotels hurting the most are those outside Stavanger’s popular city center. They would often take in guests who didn’t get rooms downtown, but now the centrally located hotels aren’t referring guests if they’re not fully booked themselves.
Last month’s decline is also likely tied to the long Christmas holidays, which cut into business traffic.