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Northern focus: Rebuilt and reborn

23 March 2006

Liverpool Liverpool is changing fast. Ten years ago, tourism might have focused on the city's heritage or the Beatles, but winning the 2008 European City of Culture bid is fuelling a huge transformation on Merseyside. Investment has been poured in and more than £3b of construction and infrastructure projects are in the pipeline as Liverpool prepares to be in the spotlight.

One of the most impressive is the redevelopment of the old Paradise Street area, set to complete in 2008. It's the biggest city-centre regeneration programme in Europe: at well over a million square feet, the £920m Grosvenor project will house shops, offices, leisure facilities and hundreds of new apartments.

Other big developments include an £80m face-lift of the city's cultural quarter and a brand-new King's Waterfront complex in the old dock area, which will create a vast 9,500-seat conference arena.

With visitor numbers expected to triple over the next five years, hotels have been quick to move in. Seven new hotels have opened in the past three years, including the Radisson SAS and the Hope Street Hotel and the number of budget hotel rooms in the
city centre has nearly doubled since 1997. Malmaison is opening later this year, and there are plans for a Jury's Inn and BDL
Staybridge hotel in the King's Waterfront development.

Case study: Liverpool Martin Ainscough, managing director, Ainscough Group

When Liverpool owner-operator Martin Ainscough first launched his Ziba restaurant back in 1998, he chose a site in the city's Chinatown district, because, he recalls, "it was the only area that had any restaurants". Since then, Liverpool has been completely transformed, with big brands and independents pouring into the city.

One knock-on effect has been, unsurprisingly, rocketing property prices. "We've been incredibly lucky because prices were cheap enough for us to buy when we first set up," says Ainscough, who owns the freehold to each of his businesses (which include the Racquet Club, an eight-bedroom members' club in the financial district, run with his sister, Helen, operations director for the Ainscough group). He thinks that decent sites are now difficult to find, largely because residential developers are snapping them all up for flats. "Rents have become terribly expensive, especially in Albert Dock. It's a real problem for new businesses when their low-rate deals expire," he points out.

Competition has obviously got tougher, too. "Yes, it's fairly intense in the bar and restaurant sector. It's one reason we've gone for a more corporate market rather than anything too fashion-led," Ainscough says, although he feels the city's dining culture is still relatively underdeveloped. "We do well with banqueting but it can be hard to get people eating out during the week. The idea of going out only on Friday and Saturday nights is still pretty embedded."

One particular challenge is recruitment. "Even though there's high unemployment, there's no real local skills base which can be a problem," Ainscough says. "I've tried to recruit local kitchen porters and junior staff but most of our people are Eastern European. I'm also trying to find a second chef but very few have the right experience."

With new retail developments in the pipeline and the City of Culture set to bring in more visitors, Ainscough is curious to know what the future holds for Liverpool. "It's hard to judge where things are going to go. It's a really vibrant city that has changed a lot, but what it needs is a long-term legacy."

Newcastle Newcastle, or NewcastleGateshead as the city now promotes itself, has always been known as a party town. But it has successfully thrown off its more raucous stags-and-hens image in recent years and has become known as a cultural centre, too. Attractions such as the Baltic Centre for Contemporary Art, international music centre the Sage and the famous Angel of the North figurehead all helped to bring in nearly four million visitors last year.

Alongside the city's evolving bar and club scene, there's a rapidly expanding hotels sector - although as yet, there's no five-star property in the centre. "We've seen 1,200 new rooms come online in the past two years, mainly in the four-star and budget categories, with brands such as Hilton and Tulip, and the hotel market is buoyant," says Andrew Dixon, chief executive of NewcastleGateshead Initiative. Nearly 30% of the city's visitors are business related and overseas traffic has been boosted with new budget airline access.

Looking ahead, the city's main aim is to develop itself as a serious conference destination. Newcastle is due to host the Art & Culture world summit in June, and the sector is now worth more than £100m to the region, representing a real opportunity for growth. As Dixon puts it, "We need a dedicated conference venue for the city to reach the next stage."

Case study: Newcastle Mark Jones, chairman of North-east-based bar and nightclub operator Ultimate Leisure

"In the old days, the only way to open a bar in Newcastle was to close down another one, because the number of licences was so restricted," explains Mark Jones, chairman of north-east bar and nightclub operator Ultimate Leisure, which operates 12 bars and two hotels in the city. But when council restrictions lifted, new bars and clubs sprang up all over the city, moving the action away from the likes of Bigg Market to create new high-profile drinking circuits such as the Gate and Quayside.

Today, Newcastle's drinking culture is shifting again. "The city used to be heavily reliant on stags and hens but the whole ‘party town' thing is dying down," Jones says. "It's becoming a more broad-based, female-friendly, premium market and nowadays, food in pubs is much more important."

For Jones, that mood change also means a rethink for the group. "Food used to represent just 1% of our business and many of our pubs didn't open during the day," he explains. "Now it's all about improving the food offer, spending money on refurbishing and daytime opening to capture lunchtime trade."

With competition coming from all angles, from individual bars to big branded chains such as Tiger Tiger and Revolution, Jones feels that the sector is now pretty saturated. "There's a real issue of oversupply now. To an extent, our own sales and profits, which dropped last year, reflect that," he says.

But despite the crowded marketplace, Jones still sees potential growth. "On the established circuits, there are some sites available. But I think competition would make it hard to break into virgin territory," he says. The hotel sector, on the other hand, is still maturing. "Outside the centre, there are high-quality hotels but there's still a lack of quality rooms in the city."

Leeds With its bustling financial sector, thriving business community and, of course, great shopping, Leeds - the "Knightsbridge of the North" as it has been dubbed - is booming. Even John Prescott got in on the act last year, describing it as one of the UK's top cities, "enjoying growth, growth, growth".

Massive investment over the past decade has turned what was a gritty Victorian city centre into a developer's dream, with more than £2.5b-worth of property completed between 1995 and 2004. A further £3.4b of construction is in the pipeline, including new developments such as City One and Clarence Dock, where a 135-bedroom Holiday Inn Express opens this September.

City tourism figures are strong, reflected partly by a mushrooming hotels sector. Before 1990, there were only seven hotels in the city centre. Since then, bedspaces have more than tripled to over 3,000, with Ibis, Jurys Inn and Bewley's Hotel among the recent arrivals. Current proposals could see the totals rise to more than 4,500 in the next two years.

Darren Bond, associate director at Christie & Co in Leeds, doesn't think the market is overprovided. "I can think of a couple of operators who now are looking for second sites in the city and the market is still growing," he says. "For example, the first apart-hotels opened recently, competing at four-star level. If there is concern, it's more at the number of residential apartments coming online this year and next."

Case study: Leeds Belinda Dawson, general manager, 42 The Calls

"It's hard to believe, but the riverside area, where we are now, used to be a part of Leeds you didn't ever go to," says Belinda Dawson, general manager of townhouse hotel 42 The Calls. Now a thriving quarter of bars, restaurants and smart apartments, many of the buildings along the river, including the 41-bedroom hotel, were converted from old mills as part of a regeneration scheme in the late 1980s.

As somebody who has lived in Leeds for 15 years, Dawson has watched the transformation take place but she admits the scale of change still surprises her. "The hotel opened back in 1991. In those days, there were only a couple of streets where people could go out," she remembers. "Now people come to Leeds just for the bars and clubs. It's a huge weekend-break destination in its own right."

Occupancy at the hotel averages 75% and weekends are usually fully booked, mainly with southerners drawn to the shops and nightlife. "Leisure is strong, as we have a bit of an edge over some of the hotels, being where we are and in a lovely building," Dawson says. But corporate trade is a tougher call. "Our main competitors include Malmaison and Radisson and we're all fighting for the same midweek market," she says. A pressure to cut rates has sometimes been inevitable. "You need to be adaptable, and see what people are prepared to pay." Does she think the market has reached bursting point? "It's definitely getting there. Rates have dropped since the boom times six years ago but new hotels are still opening."

One thing that Leeds still lacks, though, is a large-scale conference space. "We're fighting to get an arena built in the city, so that bands and big conferences can come here," Dawson says. "At the moment, we can't do big numbers so they usually go to Manchester or Sheffield and we miss out."

Manchester If there was a competition for Manchester's most striking landmark, it would be a tough contest. Forget regeneration of mills and warehouses - it has all been done already. Nowadays the city is re-emerging in skyscraping forms of glass and steel, such as the 47-storey Beetham Tower on Deansgate, set to open later this year.

The slender glass tower will be the UK's tallest mixed-use building, with upper floors containing office space and luxury apartments, which start at a cool £500,000. On the lower 23 floors will be the new 279-bedroom Hilton Deansgate, complete with swanky bar featuring floor-to-ceiling windows overlooking the city.

Further Manhattan skyline-esque plans include the new 60-storey Inacity Tower, just behind Piccadilly station, which will house a conference hall, shops and a 220-bedroom hotel, while the Great Northern Tower on Peter Street and the Civil Justice Centre in the Spinningfields complex are also under way.

Manchester's enormous variety of hotel accommodation, from budget up to five-star, also continues to expand. Last year's openings include the boutique Great John Street Hotel and boutique-style serviced apartments Staying Cool. Looking ahead, both Macdonald Hotels and City Inn are due to open properties in 2007.

Case study: Manchester Iain Donald, operations director, Individual Restaurant Company

He might have been based in Manchester for 22 years, but Iain Donald, operations director of the Independent Restaurant Company, is still excited about being in the city. The group opened the Manchester Restaurant Bar & Grill five years ago, launching the Italian brasserie-style Piccolino's in 2003 and since then, he says, the market has simply exploded. "It also has such a competitive edge and I can't think of many places that have produced such an amazing growth pattern," he says, reeling off the names of other Manchester-born brands such as the Living Room, Revolution and La Tasca.

Growth really started about 10 years ago. "It's a difficult thing to say, but the IRA bomb in 1996 was a turning point," Donald says. The boom in restaurants and bars since then is well known but he says the market is still evolving. "We're seeing a second wave, with southern brands such as Carluccio's, Strada and Las Iguanas arriving now."

New districts, such as the trendy Northern Quarter, have helped reorientate the city, while inner-city living has meant that Sundays "have gone from being a dead zone to one of the busiest days of the week". But a thriving central location now comes at a price. "Rents are very highly geared in the centre," Donald says. "To have a bit of extra petrol in the tank, you'd need to have got in early on." At the top end of the scale, he's not sure the market's quite there yet.
"It would be hard to sustain something like a Gordon Ramsay-style operation here," he says. "I'm not sure demand would be sufficient to carry it commercially."

Having built up a solid platform in Manchester, Donald's focus now is to roll out the two brands around the UK. But he's under no illusions about the market closer to home. "New people are coming in here all the time, wanting a slice of the action and chasing existing business. We've got a loyal following but you can't afford to be complacent."

Northern Restaurant and Bar
Northern Restaurant and Bar, the only exhibition for the northern restaurant, bar, pub and hotel industry, will take place on Monday 27 and Tuesday 28 March 2006 at Manchester's G-Mex exhibition centre. The show will feature more than 300 suppliers and a mix of seminars, practical demonstrations and networking events.
For further information see page 57, or visit www.northernrestaurantandbar.co.uk.

Tourism and hotels
Greater Manchester Annual number of visitors: 90.7 million
Annual value of tourism: £2.39b
Number of bedspaces: 42,549
Average hotel occupancy: 74%
Key attractions: The Lowry, Manchester United FC, Museum of Science and Industry

Leeds
Annual number of visitors: 11 million
Annual value of tourism: £735m
Number of hotels: More than 3,000, with plans to increase to 4,650 by 2008
Key attractions: Leeds City Art Gallery, Roundhay Park, Royal Armouries

Newcastle
Annual number of visitors: 3.8 million (UK visitors only)
Annual value of tourism: £550m
Number of hotels: 51, with 5,800 bedspaces
Average hotel occupancy: 75%
Number of UK visitors: 3.8 million in 2005

Liverpool
Annual value of tourism: £1b in Merseyside
Total number of hotels: 81, with 8023 beds
Average hotel occupancy: 73%
Key attractions: Tate Liverpool, Albert Dock, Beatles Story

TagsTourism and Trends
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