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MA500

Pubs with rooms are 'not like Fawlty Towers now'

By Nicholas Robinson+

16-Feb-2017
Last updated on 17-Feb-2017 at 16:26 GMT2017-02-17T16:26:15Z

Pub business opportunity: Dominic Worrall says rooms offer more profit
Pub business opportunity: Dominic Worrall says rooms offer more profit

Visitor numbers across Britain are expected to rise further as the weaker pound makes it more attractive to foreigners and Brits alike, according to Dominic Worrall, owner of the Bull in Ditchling, East Sussex.

The opportunity is huge and should not be overlooked, especially as more than 36m overseas tourists came to Britain last year, said Worrall.

The domestic market also spent more than £19.6m on overnight trips in England alone, which will rise by 4% this year, according to the Great British Pub Awards 2016 Pub of the Year winner.

Rather stay in a pub

In a recent survey by Visit England, almost half of those asked said they would rather stay in a pub than a hotel, he added.

Speaking at the MA500 event in Birmingham today (16 February), the award-winning operator said pubs with rooms have outgrown their shady ‘Fawlty Towers’ image and have become a viable money-boosting opportunity.

“The pub is evolving there are post offices and libraries in them,” he said. “While that is brilliant, put rooms at the top of the list because the business becomes a 24-hour operation. Although that adds staff [costs], it also adds more to the bottom line and you can offer staff more flexibility [on the hours they work].”

At the Bull, which currently has four rooms, £12,000 net profit per year, per room, is generated and more will be added to the bottom line once another four come into service soon, he claimed.

“Someone who I know is converting 11 rooms at a cost of £600,000, but there is a potential four to six-year payback on those and a massive increase on profit, which will come from making use of redundant space,” he added.

Viable letting business

It is too often the case that pubs, which could have a viable letting business, are allowing “redundant” space to stagnate when it could be turned into a profitable income stream.

“What’s the alternative to not adding rooms?” Worrall asked. “It’s living above the pub – when you could rent somewhere much nicer yourself – or offering it as staff accommodation to save only a little on wages.”

Although some operators are put off by the cost of adding rooms to their sites, Worrall added that low interest rates should be taken advantage of and there is also the opportunity to tap into funding from certain organisations.

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