The hotel sector in Birmingham is reporting a surge in bookings and strong demand as the sector posts a continued spell of strong growth.

Owen Mackney, partner and hospitality and leisure sector expert at PwC in the Midlands, said the improving economy should enhance recovery prospects.

He said: “The economy has put the fizz back into the UK hotel sector with a return to confidence and stronger demand. Continued economic recovery should mean sustained and enhanced prospects for hoteliers in 2014.”

However Mr Mackney warned the sector could overheat.

“Many cities have performed well, but there remains pockets of oversupply with budget chains adding to hoteliers’ pricing pressures. But it does mean a more crowded UK hotel landscape. For the consumer, new supply is progress, with new brands, more choice and more price competition.”

PwC expects the city’s average daily rate (ADR) to reach almost £60 in 2014, still below the 2008 peak, even in nominal terms, but the best result since 2009.

It also expects 1.8 per cent growth in revenue per room (RevPAR), taking it to nearly £42.50, again the best result since 2008.

“There has been a significant growth in hotel transaction volumes with both large portfolio and single asset deals. The momentum seems set to continue as the banks are showing a much greater willingness to deleverage from hotel assets, either through the sale of the business or the loans directly, and more recently portfolios of hotel loans,” added Mr Mackney.

“The current level of UK hotel transaction activity seems set to stay with a significant pipeline of deals for the New Year.”