Birmingham hotels braced for a difficult 2009
Dec 23 2008 by Christina Savvas, Birmingham Post
Birmingham’s hotel sector has seen something of a renaissance in recent years. Ever since the arrival of the Hyatt in Broad Street almost 20 years ago, the city has become increasingly attractive to large and small operators alike.
However, as the recession starts to bite, companies and individuals are frantically searching for ways to save money and it is business expenses and personal leisure outlay that appear to be in the vanguard of this new thrifty approach.
A recent report by PricewaterhouseCoopers revealed that occupancy rates in Birmingham have declined and revenue per available room also decreased for the third month in a row to September, to be down by 2.4 per cent .
But despite predictions that the situation will get worse in 2009 as the country sinks deeper into recession, hoteliers in the city believe that things could be a lot worse.
Kathrine Ohm Thomas, general manager at the 39-storey Radisson SAS on Holloway Circus Queensway, said: “Everyone can see that occupancy rates in the city have gone down but ours have not. Our RevPar is the same but we are the new kid on the block, even though we have been here for three years. We are in a fantastic location, very noticeable from a building point of view. We know the city and the city knows us.
“September was slow for us despite the Conservative Party conference but we had a very good August. It was a little strange because things usually pick up in September but they got going a little bit later this year, it’s almost as if people hesitated initially but since then October, November, December has been extremely busy.
“We get a lot of corporate business in midweek and we get some of the business people returning for leisure to enjoy a weekend in Birmingham. It is fantastic that Birmingham has so much to offer.”
Mark Davies, general manager of Hotel Du Vin, said occupancy rates for the 66- bedroom hotel have also remained high and are in line with its budget at 79 per cent.
He said: “We are where we should be at the moment. We are more of a budget hotel compared to the higher-end Radisson and Malmaison in the Mailbox, so I would say we are a bit more immune. We have a good location, close to businesses, accountancy and law firms and we have been here for a long time and we do have a reputation for our bistro.”
Mr Davies said the hotel had also managed to retain its price of £115 per room, down by just £6 on last year. He added: “What we are finding is that bookings are more last-minute, and people will ring less than 24 hours in advance to book a room. But I think the fact that we are keeping up occupancy rates shows that Birmingham is a good city that people do want to visit. Next year will be more challenging.”
The report by PwC said 2008 had been lacklustre for the Birmingham hotel industry with buyers, not sellers in the hotel industry in the driving seat. It said rates had held up and remained in positive territory overall but it predicts that
