The Commonwealth Games came to a close in the beginning of August, marking the end of a successful large sporting event, raising Birmingham’s profile domestically and internationally and paving the way for future high-profile event opportunities.
With around five million visitors coming to the city, according to the Central Business Improvement District, hotel metrics went through the roof. Occupancy averaged at around 90% while rates sat at around £130. Saturday, 6 August saw performance metrics peak as occupancy reached 95% and average rates topped the £150 mark, highlighting an impressive premium for hotels in the market.
The wider region also benefited as occupancy across most West Midlands submarkets averaged between 85%-88%, highlighting the spillover demand. During the 12-day period, hotels in the region received an additional £19.4 million in rooms revenue compared with receipts from 2019 for the same period.
Traditionally a slower month, August is likely to be one of the best performing months for the market and wider region this year, given the impact from the Games. It should also hopefully start to influence some demand shifts in the future as many discover what Birmingham and its surrounding areas have to offer.
Our forecasts assume the year will end on a high, surpassing 2019 revenue per available room levels, with average rates being the key driver as these are expected to be sustained in the medium term, assuming there are no major external shocks.
Various large-scale events are due to come to Birmingham. The Conservative Party conference will be held in Birmingham this October at the International Convention Centre with forward-looking data already showing some signs of strong demand during the period.
Similarly, next year, Bruce Springsteen’s concert in June is already driving occupancy on the books, with the city centre seeing nearly 50% of rooms being booked just under a year in advance. Meanwhile, on the sporting events theme, Birmingham has been selected to host the Trampoline Gymnastics Championships, the International Blind Sport Association World Games and a number of cricket matches during The Ashes, all in 2023, highlighting the ongoing positive impact from the Games.
Catalyst for the Future
The Games could also be seen as a catalyst for future high-profile events that the region is bidding for. Birmingham was recently shortlisted as a potential host for the Eurovision contest, which tends to attract thousands of visitors to its host city and, should it be selected, will continue to boost the city’s profile as an international destination.
It has also confirmed its bid to host the European Athletics Championships in 2026,capitalising on its recent experience. Should it be selected, the region’s hotel market is likely to greatly benefit through induced room nights for the duration of the event, while enabling the market to diversify its demand base, taking advantage of growth from key international source markets too.
Birmingham was included in sports communications and advisory firm BCW Sports' annual ranking for major sporting events this year for the first time and this, coupled with the success from the Commonwealth Games, could put Birmingham at the forefront of competitive cities.
Previous Commonwealth Games hosts, such as Glasgow, could point to how the Games in Birmingham may benefit the city’s hotels longer term. Since hosting in 2014, Glasgow has experienced a shift in demand towards shoulder months which experienced lower levels of occupancy, such as March through May and September, gaining around three to eight percentage points in occupancy, while average rates following the Games increased by around £10 and continued to see year on year growth.
Glasgow has since been host to the European Championships in 2018, the COP26 Climate Conference in 2021 and is due to host the World Cycling Championships in 2023, all boosting the city’s profile and benefiting the local hotel landscape, with the hospitality sector seeing further investment as a result. From a global perspective, the Gold Coast, hosts of the Commonwealths in 2018, saw average rates increase by approximately A$10 in the years that followed, as hotels had greater pricing power to drive rates, due to sustained demand.
The next few months and years will be crucial for the region to capitalise on future opportunities. Sporting and cultural events can have a long-lasting impact, benefiting not just the tourism and hospitality sector but the wider economic and political landscape.
According to a study commissioned by UK Sport and the City of London Corporation, major sporting events have the potential to drive £4 billion in trade and investment, in addition to an estimated £7 billion in direct, expenditure-driven economic impacts, emphasising the importance of these events to the country and the region.