Oop oop 'n' away as North rises to the challenge of modern tourism

Northern England has thrown off its international reputation as a place of dark satanic mills and boarded-up terraces by confirming its position in the ranks of Britain's top tourist destinations.

The post-industrial renaissance of Manchester and Liverpool as well as Birmingham in the West Midlands has seen the cities eclipse the popularity of more traditional – and picturesque – honeypots such as Oxford and Cambridge to report record increases in the number of visitors last year.

Figures from the national tourism agency, VisitBritain, show that while London and Edinburgh continue to dominate holiday itineraries, the reinvention of provincial cities is paying lucrative dividends.

More than four in 10 visitors to the UK now include an overnight stay in England outside the capital, the figures showed. In 2011 the number of people staying overnight in Manchester and neighbouring Salford rose 15 per cent to 936,000 – putting it in third place behind the English and Scots capitals.

The popularity of the city's two Premiership football teams, its shops, bars and restaurants and the development of Salford Quays, home to the Imperial War Museum North, the BBC and The Lowry arts centre are helping drive the boom, it was claimed.

Meanwhile, Liverpool – which has undergone a major refurbishment of its city centre shopping district, waterfront and multi-million pound cultural makeover in the past five years – overtook Glasgow for the first time to join the top five.

Patricia Yates of VisitBritain said: "These results confirm international visitors who might come here because of the global appeal of London are starting to appreciate our vibrant cities outside the capital, and the very different offerings of Edinburgh, Birmingham, Liverpool and Manchester."

Despite the euro crisis and global recession fears, 2011 proved a record year. The number of international visits hit 30.6m while spending topped £17.2bn for the first time.

And amid mounting fears that the Olympics could lead to a reduction in tourism this year, as people stay away deterred by rocketing hotel prices and security fears, the early indications are that numbers are likely to remain broadly flat on last year – although still up on 2010.

Claire McColgan, director of culture at Liverpool City Council, said art, sport and events had been a central driver to the city's new confidence following its year as European Capital of Culture in 2008. "You cannot just sit back and say 'We have done that now'. Outside London you have to keep telling a different story all the time so that you keep getting people coming back. So that it is not just all about Beatles and football," she said.

In 2010/11, culture and the arts generated £1.6bn for the local economy and now supports an estimated 23,000 jobs in the city. Last month's Sea Odyssey celebration lured an estimated one million visitors to the Mersey waterfront. Liverpool's new arena and convention centre have also proved a magnet for high end tourism, while a new £50m exhibition centre is due to open in 2014.

Julia Fawcett, chief executive of The Lowry, also welcomed the figures. The £106m centre is the most popular tourist spot in Greater Manchester attracting 834,748 visitors last year.