Like for Like?

The other day I saw someone commenting about the hotel he was staying in (a Hilton Garden Inn in Glasgow) having doubled its rates since December.

One thing we can be sure of is that the pandemic restrictions will have dropped a bomb on the business models of airlines, hotels and other accommodation, and restaurants … to name but a few.

I visited Orkney in 2019 and again last month, and whilst a like-for-like comparison is not possible, some “now” and “then” information is always interesting.

In 2019 I stayed at the Storehouse in Kirkwall (the main town on the Orkney mainland) and this year I was in the Sands Hotel in Burray – an island to the south of the mainland. They are different types of hotel but similar in that they are both small places.

The Sands is ranked as a 4 star small hotel by the Scottish Tourist Board’s classification.

Bed and breakfast for two midweek nights in the Sands at the end of June came in at £120 per night. I think they had a 2 night minimum. VAT was at 5% and included in the rate.

Two nights of bed and breakfast at the Storehouse in July 2019 – a Friday and Saturday night – cost me £150 per night. VAT was at 20%, and included in the rate.

My gut instinct tells me the Storehouse on a July weekend would be quite a bit more expensive than the Sands midweek in June.

I have no way of knowing if the Sands passed the VAT rate reduction on to customers to encourage them to book, or kept it to help recover some of its lost revenue during restrictions. Personally, it does not matter to me and it is a commercial decision for each establishment to make.

Just for context, my hotel in Belfast earlier in June was the AC Marriott and it cost £97 per night, again including breakfast and VAT. It was a king size room with a river view, and so not their cheapest offer.

A city centre chain hotel is completely different to those small island hotels obviously. Anyhow, context is context.

In 2019 I flew with Loganair from Aberdeen to Kirkwall, and the price was £146 return.

Last month the Inverness to Kirkwall return cost £271.

I am pretty sure the fare basis was the same – their Flex fare which includes a checked in bag. I do not remember how far in advance I booked the 2019 flight, and that is usually a big factor in the prices.

I am not sure of the details, but Loganair will be getting a public service subsidy from the Scottish Government to keep these lifeline services to the islands available. That was probably the case in 2019 as well.

Internal flights in Scotland often seem expensive because in most cases (Islay being the exception) Loganair has no competition and the alternative is taking the ferry. Island residents have their travel costs subsidised.

ⓒ iain taylor, 2021

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