HUNDREDS more hotel rooms are lying empty in the Capital as a result of the credit crunch.
New figures show that in the six months to the end of June, an average of 72.6 per cent of the city's 8000 hotel rooms were occupied at any one time – 3.5 per cent lower than the same period last year.
The drop in occupancy in Edinburgh is much hi
gher than the average drop seen across the UK, at 0.4 per cent.
Analysts say that the sharpest decline has been in budget hotels as low-spending groups affected worst by the economic slowdown opt to stay at home. Bad weather has also been blamed for less people coming to the Capital.
Alistair Rae, a partner at accountant and business adviser PKF, which compiles the figures, said: "Everyone hoped that (2007] was a significant period of growth that would be sustained. But perhaps we didn't realise just how miserable the summer was going to be weather-wise.
"It is the lower-end that is seeing the biggest drop. The tourists that visit a place and stay in a limited service hotel are probably the first to be affected by the credit crunch. The business traveller or those staying in a higher standard of hotel will tend to have the money to do so.
"Guys coming for a stag weekend will probably think about staying at home."
The latest fall also means that occupancy remains lower than nearest rival Glasgow, which saw a slower decline of 2.9 per cent.
In June alone, Edinburgh occupancy was down 5.6 per cent on June 2007 – the sixth successive month that the figure has fallen on the equivalent month last year.
Mr Rae expects July and August to continue to be down on last year. He said: "We've obviously had a miserable period of weather and there appears to be a decline in ticket volumes at the Fringe, so it seems likely there will be a continuation. It is turning out to be the more difficult year we expected when the first effects of the credit crunch were being seen."
Despite the drop, Mr Rae and hoteliers point out that overall Edinburgh occupancy remains above the UK and Scottish average.
Philip Counsell, general manager at the Holiday Inn Edinburgh, said: "Edinburgh has a higher base to fall, so that can make the drop sharper. It also has more of a reliance on the corporate and banking sectors and people are drawing costs in.
"Some holiday business, from the United States and Japan in particular, is down but there are big companies here like RBS and HBoS and both have been hit by the credit crunch, and they will both be cutting costs."
He added that his own hotel's business in August had been "at least as good" as last year.
The full article contains 483 words and appears in Edinburgh Evening News newspaper.
