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With record breaking numbers of international visitors into the city and the highest ever passenger figures at the airport, it is little surprise that both occupancy levels and room rates have strengthen in Birmingham in the year to April 2016.
Occupancy has surpassed 70% on an annual basis for the first time in recent years having experienced a period of static occupancy levels in the high sixties.
Tourism in the city in 2015 reached £6.2 billion and there were a record 38.1 million visitors to the city. This exceeds the record in 2014 of 34.0 million, and was undoubtedly helped by the Rugby World Cup and improved transport links in both rail and air following the redevelopment of New Street station and additional airlines operating from the airport.
Interestingly the increased occupancy levels and record visitor numbers to the city did not help F&B results with both food and beverage revenue per occupied room falling by 1.4% and 1.2% respectively. This is more indicative of the improved casual dining sector across the region, as opposed to being specific to Birmingham hotels.
Birmingham have resisted the trend of other cities by reducing their labour costs relative to revenue. Their ability to maintain this ratio at 30.2% into 2016 with the introduction of the living wage will be dependent on how successfully operators can further increase both occupancy and ARR.
Overall, it has been another encouraging year of growth for the hotel sector in Birmingham. The city has been voted one of the top UK tourist destinations for 2016 and are hosting a number of events to celebrate 400 years since the death of arguably the most famous playwright of all time, William Shakespeare.
Going forward into 2016 and 2017, Edgbaston will play host to more cricket matches than ever before and whilst Villa Park will no longer play host to Premier League football we would expect a further record breaking year of visitor numbers in 2016, strengthening an already buoyant hotel sector in the city.
