The North star

With the Commonwealth Games due to take place in Manchester next July, restaurateurs and hoteliers are elbowing their way into the city.

It has no sand, sea and, by reputation, no sunshine, but Manchester is now the official number three destination for foreign visitors to the UK behind London and Edinburgh, according to the British Tourist Authority. This situation is greatly assisted by its northern international gateway airport into the UK, but tourism is still worth £1.5b a year to the city.

At the heart of that success, according to Mark Alexander, chief executive of the city's development agency, Marketing Manchester, is the fact that the reasons why tourists come to Manchester rarely involve sand, sea or sun. Virtually everything anybody does is under cover, from the biggest selection of shops outside London to the £25m Manchester International Convention Centre. Even the terraces of Manchester United have a shelterdeck over them.

The current focus point for tourism in Manchester is the Commonwealth Games, scheduled for 11 days next July. The games are expected to be a huge boost for tourism revenues in the region in the four weeks surrounding the event - one estimate is £50m - and, more importantly, to deliver long-term tourism benefits from the exposure.

Hotel development in Manchester is expanding at an unparalleled speed. Ten years ago there were 10 large hotels in the city centre; now there are 28 and 3,000 bedrooms. This year alone has seen the opening of the five-star RF Hotels' Lowry at Salford Quays, a major refurbishment of the Midland Crowne Plaza in Peter Street and development work on a 250-bedroom Radisson-Edwardian in the disused Free Trade Hall and a 250-bedroom Hilton in Deansgate.

Even more spectacular is the number of city-centre bedrooms in the pipeline. Either under construction or at various stages of planning application are a further 3,000 bedrooms. The possible doubling of the number of hotel rooms in the city in the next five years represents a huge gamble.

Peter Bech, general manager of the Marriott Worsley Park and chairman of Manchester Hotels Association, says the amount of bedstock coming into Manchester is both exciting and scary. The exciting part is the amount of infrastructure, commercial and leisure development happening in the region in tandem with the hotel development.

Says Bech: "The Commonwealth Games will put us on the map, but it's what will be left in place after the games that is fantastic. We have got the second runway at Manchester Airport, the new convention centre, all the art and culture developments, the shopping centres and the sport."

Sports tourism is a unique selling point which nowhere else in the UK can match Manchester on. It cascades down from the biggest football club in the world with its 68,000-seater stadium and club museum attracting half a million visitors a year. But there is much more to Manchester sport than Old Trafford. There are the Velodrome, Britain's main arena for indoor bicycle sport, an international swimming pool and 90 golf courses in Greater Manchester.

Yet what is scary to Manchester hoteliers looking at the bedroom expansion figures is not so much the number of bedrooms coming on stream, but whether the extra tourists will gravitate to high-rack, full-service hotels or the mushrooming budget accommodation in the Manchester area.

Bech deflects the threat of overprovision of bedrooms by saying that hoteliers in the city don't believe that all rooms for which there are planning applications will actually happen. "What we are concerned about is which end of the market will get the new business, budget or four-star," he says.

An examination of occupancy levels and room yields in city-centre Manchester in the past year suggests that having confidence in the future could well be over-optimistic, and that was before the shattering events of 11 September. Year-on-year occupancy figures for July 2000 compared with July 2001 in Manchester's leading hotels from Monday to Wednesday were 76.5% and 70.3% respectively. From Monday to Wednesday, average room rate across the city was £60.97 in June 2000 compared with £59.41 in June this year. These figures reflect all levels of bedroom space, from budget to luxury.

The weekend break market is where Manchester has a long haul. There are lots of empty bedrooms in Manchester at weekends despite huge shopping complexes such as the Arndale Centre and the Trafford Centre, and cultural attractions, including 30 museums, concerts attracting the biggest of international stars and more than 3,000 bars and restaurants.

The restaurant scene in Manchester city centre has been transformed in the past 10 years. In the past the comparison often made between Glasgow and Manchester was that while there was a "going into town at night" culture in Glasgow, there was a "get out of town at night" culture in Manchester. The city's Chinatown and Indian restaurants prospered, but mainly because of their low prices. That has changed, and Manchester people now go into town at night.

Expansion-minded restaurant concepts from outside the North of England have been quick to recognise the revival of Manchester city centre and their announcements of new openings invariably include Manchester as a favoured location. Current high-profile names in Manchester city centre include Groupe Chez Gérard, Gary Rhodes with Rhodes & Co, Wagamama, Conran's Zinc Bar & Grill, Livebait and Raymond Blanc's Petite Blanc.

The truth is that while a handful of these restaurant incomers are making good revenue from Manchester city centre, the streets are paved with sharp pebbles as well as gold. Oliver Peyton is the most high-profile recent Manchester failure with his Mash and Air concept in Canal Street, but other collapses have included Sticky Fingers and the Reform Club.

One of the first high-profile chef names to establish in Manchester was Paul Heathcote, who opened Simply Heathcotes five years ago. He believes of all the big-brand, full-service restaurants which have rushed into Manchester in the past three years, no more than a dozen are making the profits they predicted.

Yet Heathcote is still upbeat about Manchester: "There is no question Manchester is expanding," he says. "It is a fabulous city, but there is not the kind of footfall here you get inside the M25. Restaurateurs have looked at the lower Manchester rentals, planned a London-scale operation and made the same kind of profits predictions. London restaurants have business six nights a week, but they don't in Manchester. Manchester people come out on a Friday and a Saturday."

The buzziest restaurant in Manchester at the moment is the Restaurant Bar & Grill, which opened in Deansgate in January. Ownership and development is by Derek and Edwina Lilley, Iain Donald and Stephen Garrity, the team that founded the Est Est Est Italian restaurant chain before selling it to City Centre Restaurants. Operations director Donald is cautious about turnover figures but does not deny reports of £45,000-plus a week net.

But he admits that after the honeymoon period they will have to work hard to maintain customer footfall. "Manchester's good, but Manchester's tough. Take your foot off the pedal for a second and you're in trouble," he warns.

Manchester facts

Annual value of tourism: £1.5b, 6% of GDP of the city
City-centre hotels: 28, with 3,000 bedrooms
Current midweek average city-centre room rate: £63 across all accommodation.
Bedrooms planned: planning applications in for a further 3,000
Key attractions: Lowry exhibition, G-Mex Exhibition Centre, Halle Orchestra, MEN Arena, Manchester United FC