Why are international investors interested in Birmingham?

Birmingham is a city and metropolitan borough in the West Midlands County with a diverse population of circa 1.1m, making it the most populous city in the UK outside of London. Located about 130 miles to the north of London, the city is a major transport hub and benefits from excellent road connectivity via the M5, M6, M40 and M42 motorways. The city is also at the heart of the UK rail network. After its £750m, five-year transformation investment, Birmingham New Street is the largest and busiest train station in Birmingham, with excellent rail links to major UK destinations and direct rail links to London, Manchester and Edinburgh and is also set to benefit from the HS2 rail line. Birmingham Airport is located approximately six miles east of the city and has direct access to over 120 destinations.
 
The local economy is primarily driven by the services sector, accounting for nearly 88% of the local economy and records an annual economic output of around £24.7bn, making it the third largest city in the UK. The strength of Birmingham’s economy over the past decade has been centred on the growth in finance and business services as a result of the city’s transformation through various regeneration schemes (i.e. Bullring, New Street station redevelopment and Grand Central). Furthermore, there is a 20-year Big City Plan and the supporting Birmingham Development plan 2031 which aims to transform Birmingham City centre into a world class city centre. With five universities and around 65,000 higher education students, Birmingham is the second largest UK student city. It is also one of the leading centres of research and development with over 35,000 research students.
 
According to the 2016 STEAM Report published by Marketing Birmingham's research arm the Regional Observator, the city received a record 39.1m visitors (including day visitors) spending around £6.5bn, a 4% increase on 2015’s total expenditure of £6.2bn. Despite its reputation as an industrial city, Birmingham has become a popular tourist destination in recent years as a result of the ongoing city regeneration and is a well-established destination for weekend breaks, given its excellent retail offering, vibrant nightlife and large music and sport venues. Over the recent years, Birmingham has become the fourth most visited destination in the UK for international travellers; the airport handles over 11.6m passengers a year.
 
When analysing hotel supply trends, the Birmingham hotel market has witnessed substantial additions over the past decade. Since 2008, the hotel supply has increased by approximately 32% with notable additions including the 178 bedroom Genting Hotel and the 253 bedroom Park Regis Birmingham. Despite high levels of supply, Birmingham remains a key market for hotel operators to be represented in and the top two brands with regards to numbers of rooms are Travelodge and Premier Inn. Generating the demand is the fact Birmingham is the leading commercial and leisure destination in the West Midlands. Conference and banqueting facilities such as the International Convention Centre and the National Exhibition Centre host over 500 events every year, attracting approximately 6m visitors annually, which tends to have significant effect on hotels with a spill-over into the city centre during the larger events.  Birmingham hosted the Conservative party conference in 2014 and 2016 and will do so again in 2018 and 2020. Each event is estimated to bring about 14,000 delegates and boost the city’s economy by c. £17m.
 
Assuming continued economic growth, the outlook for the Birmingham hotel market remains positive. Continued investment into the city and improved connectivity will continue to attract investors, especially those looking for better value for money. Hotspots for interest will be city centre and locations with easy access to the motorway network.
 
If you require any advice or guidance on the hotel market in and around Birmingham, then please contact me.