City hotels buck national trend

BIRMINGHAM’S hotels saw rates strengthening through 2010, with revenue per available room up 6.1 per cent on the previous year, according to Deloitte.

Thanks to major events such as the Conservative Party Conference, revenue per room in Birmingham increased from £37 in 2009 to £39. The average daily rate for hotel rooms also showed signs of improvement, increasing from £58 to £59 year on year.

Compared to some UK cities, which saw occupancy levels drop during 2010, occupancy in Birmingham increased by 3.9 per cent, from 63.5 to 66.

Neil Rami, chief executive of Marketing Birmingham, the city’s strategic marketing partnership, said: “The hotel sector is a major contributor to Birmingham’s visitor economy, worth £168 million annually.  

“It received a boost in 2010 largely due to a series of major events – 66,000 delegates were brought to into the city for IPEX, the Liberal Democrat and Conservative Party conferences, contributing to the stand-out figures for March, May and October.”

Alistair Pritchard, tourism, hospitality and leisure partner at Deloitte in Birmingham, said: “Despite a challenging end to the year, caused by one of the harshest winters on record, the city’s hotels still managed to put in a good performance.

“The annual German Christmas Market, which draws thousands of visitors to Birmingham during the festive season, would have helped boost occupancy levels, likewise the Conservative party conference earlier in the year.”

However, according to Mr Pritchard, the outlook for 2011 is more challenging.   
 
“With future demand for hotel rooms in London and the regions beginning to weaken, caution may well be the buzz word for next year,” he said.
 
“With GDP expected to rise by just 1.3 per cent this year, the increase in VAT to 20 per cent and more challenging operating conditions for retailers, the hotel industry faces another difficult 12 months.  

“On the positive side, however, revPAR is expected to grow by 4.4 per cent in the regional market in 2011.”

But Mr Rami said a raft of new investments in the city reflected growing confidence in the city’s hotel sector.

He said: “In 2011, the city’s hotel sector is continuing to attract  investment with new 23 hotels currently in the planning or development stages, including the Sanguine developments at The Cube, Cumberland House and Kennedy Tower.  

“The visitor economy will continue to operate in a challenging environment throughout 2011, but our data shows that the city has the confidence and long term support of developers and investors who recognise that Birmingham has the visitor strategy in place to deliver a return on their investments.”