Accommodation set to become "the next big thing" in the pub industry

With a drop in consumer eating out occasions and the steady decline in drinking trade, letting bedrooms have become more important to the industry.
The facility to accommodate guests overnight means that pubs can better-cater for big, profitable functions such as wedding parties or shooting weekends. Overnight guests are also valuable for their extra food and drink spend.

“I think it is very important to have rooms as it opens up a business so much,” says The Good Food Guide editor Elizabeth Carter. “Everyone is looking for the extra stream of revenue. Due to drink-driving laws, maximising wine lists is only possible if people can stay and it also adds that extra experience.

“Country house hotels are lovely but are so expensive that they can’t be a spur of the moment booking as pub rooms can. People are not spending as much but they do still want to go away. Bedrooms are the next big thing in pubs.”

Ten-site operator Bath Ales has just finished a refurbishment turning five bedrooms and a managed flat into eight double ensuite rooms at its flagship site the Wellington in Horfield, Bristol. An outbuilding will be converted into two further bedrooms later this year.

“I think Bristol is generally under-supplied with hotel rooms but there is plenty of demand,” said retail director Robin Couling. He expects revenue on accommodation to increase from 5% to 10-15% following the refurbishment.

“Other than the significant cost of refurbishment, the day-to-day fixed cost of the rooms is quite low and brings incremental business in extra food and drink sales. Rooms can cover a large proportion of overheads — rent, rates and so on — so it is a profitable revenue stream for us. The model we will be looking at for future sites will include 8 to 20 rooms.”

Sally Rouse, hotel director at Lincolnshire group All Saints’ Hotels said: “Accommodation is vital from a GP point of view. We are squeezed from suppliers and people want more offers without the cost of a pint going up.” The group also uses its rooms to advertise dining and overnight packages to encourage consumer visits and spend.

Well-established venues, such as the Michelin-starred Royal Oak in Paley Street, Berkshire, are also turning to accommodation as a way to grow the business without taking focus away by adding more sites.