Birmingham's hotel industry witnessed a fall in revenue per available room (revPAR) during the first quarter of 2008, according to new research from accountants Deloitte.

But average room rates are up and there is hope that it could buck the current troubled economic conditions.

In the first three months of the year, Birmingham's revPAR dropped by 5.8 per cent to £50.  The biggest fall was in Reading, where revPAR fell by 13.7 per cent to £46.

In Nottingham – which has consistently come bottom of the hotel performance league tables – revPAR is the lowest in the country at just £33, following a 4.2 per cent slump.

Not surprisingly, London has the highest revPAR at £95. This was primarily driven by a five per cent increase in average room rates, which remain the highest in the UK at £124. The average room rate in Birmingham is £74, an increase of £2 since the last quarter.

According to Deloitte's HotelBenchmark Survey, the historic city of Bath boasts the highest average room rate outside the capital at £86. Despite occupancy dipping slightly, average room rates have increased £5 over the first quarter last year.

Hotels in Liverpool are benefiting from the city being the European Capital of Culture 2008, with a host of festivals and events attracting more tourists. For the first quarter of 2008, revPAR in the city rose 8.4 per cent, driven by increases in both occupancy and average room rates. Other cities across the UK performing well include Belfast, Hull and Inverness.

Alistair Pritchard, director responsible for Deloitte's tourism, hospitality and leisure sector in the Midlands, said: "Overall, the first quarter of 2008 has been a positive one for the UK's hotel industry.

"Although growth is showing signs of slowing, the fact that there has been room rate growth is a big plus for hoteliers given the current economic conditions.

"In such times, travel, hotel, training and entertainment budgets have traditionally been the first to be squeezed. In light of this, the remainder of 2008 looks challenging as businesses tighten their belts.

"In Birmingham, the signs are hopefully a little more positive. The city has just hosted the Labour Party spring conference, which attracted more than 4,000 delegates to the city, and later in the year we will be welcoming the Conservative Party annual conference, which again will boost visitor numbers in Birmingham.

"This, plus other key events throughout the year, should help to keep the city's hotel sector on a sound footing."