Room at the inn

Keith Knowles, boss of Interpub, is combining beds and beer with the company's Belushi's and St Christopher's Inns concept. By Mark Stretton.

It seems everybody is scared of Keith Knowles. He was due to meet with Tony Blair, but the Prime Minister has wussied out citing ructions in the Middle East as an excuse.

The Interpub boss was on his way to Number 10 to discuss youth tourism. He has a vested interest as his company operates St Christopher's Inns and Belushi's, the bars and beds concept.

One man's loss is another's gain and the imposing managing director decided to spend his morning telling thePublican.com about the world according to Interpub instead.

Belsuhi's is an entertainment bar serving up "Tex-Mex" food while St Christopher's Inns are the "hostels with attitude" that are proving popular with backpackers and travellers. With 12 sites, the company is braced for further growth.

"We have just completed our second round of fundraising," Keith says. "In the end they [the financial institutions] said 'if we give you some money, will you leave us alone?' We raised £11m."

The company will spend that cash in both the UK and beyond. A two-year search in Paris has led Keith to a 400-room site near the city centre, a venture that will cost the company an initial £3.5m for the freehold, and a further £1.5m in development. "France is like a seductive woman," he says. "It looks great and is very desirable with all the gear on but you don't really know what you're going to get.

"It's a lot of money but it's only expensive if we make a mistake."

The company aims to establish its hostel and bar combination in key European cities, with Amsterdam, Barcelona and Rome also on the radar. Keith says New York and Sydney would be the ultimate.

The desire for sites in foreign gateway cities is not the ego talking, but common sense. Travellers visiting key UK cities are just as likely to check out other parts of Europe and, with operating units overseas, the company can cater for more than just the British leg of a journey.

He says St Christopher's customers come from all around the world and not just Australia or New Zealand as some might expect. "We had one month when Argentineans made up the majority of our bookings," he says. "At the moment we have a lot of Koreans and a few Portuguese coming through - I don't know why."

Just like his customers most of his staff are travellers. "Our biggest problem is staff retention but we have turned the problem into a solution," Keith says. "We have ears and eyes everywhere - we have the details of everyone who has ever worked for us and they have ours. When we need to find staff we send emails out - it's like Mother Goose calling the chicks."

The company receives about 20 messages a day from former employees looking for work. Consequently it never advertises for staff.

The hostels feed traffic into its bars and locals are constantly meeting new people. "Why do people go down the pub?" he says. "To meet other people. Regulars at our bars never get bored because we always have travellers passing through.

"We have one old gent who is 94-years-old who has been a regular for years. The backpackers love him and he loves them."

Perhaps unsurprisingly, the Interpub boss is almost evangelical about travelling. "I believe it's educational for one," Keith said. "The youth are starting to realise the value of travelling. My son is 15 and he is already planning his gap year.

"Also, if you can get a Russian talking to an American, talking to a Korean, talking to a Frenchman, all understanding each other, I passionately believe the world becomes a safer place."

Keith is the third generation of Knowles in the pub trade but before joining his father's business he went travelling to the Middle East, aged 16, working as a roofer in Saudi Arabia.

He returned and immediately joined the business. "I hadn't trained myself I just assumed that because my father and grandfather had been in the trade, I knew what I was doing. "Getting involved in Investors in People was the best thing we ever did because it taught us about training."

Consequently the company has been recognised for its training with two of the British Institute of Innkeeping's National Industry Training Awards. "If, in this business, you don't get the training right, you will fall over," he said.

As he became more involved in the business, Keith realised it was important to get the offer right. "We were running a complete mix of pubs - gay, City, community, cocktail bars and so on," he said. "It was impossible to run, we weren't making any money and we had no direction."

The Knowles examined cash streams, looking beyond the norm of beer, food and machine takings. "We looked at accommodation," he says. "The bottom end was done so badly. You literally rolled your sleeping bag out on to a flea-infested mattress on the floor and that was it."

Keith decided he could do it better. Interpub found a site in London Bridge and designed a website, with the help of a Canadian female ice hockey player. "That cost me two weeks board, four pints of Guinness a day and food," he said. The company bought a second site across the road, a coffee shop with rooms above, which they called the Orient Expresso.

At this point Keith found a chairman in Tim Sykes and together they went looking for money. By selling 38 per cent of the company (15 per cent to Scottish & Newcastle) they raised enough cash to open sites in Camden (50 beds), Greenwich (50 beds) and a third site at London Bridge with 167 beds. Now, some years later, the business boasts 12 sites, and will soon open another site in Bath.

A trained counsellor by profession and a man who knows his mind, Keith has some strong views and like many is worried about the prospect of licensing control switching to local authorities. "It's like putting Sooty and Sweep in charge," he says. "I think it's the most scary piece of legislation the pub industry has faced for years."

He says local councillors and residents' associations are small-minded and petty. "My offices are in Burnham Beeches," he says. "When my neighbour complains, which is about once every two years, I really listen because I know there's a valid reason.

"But when the residents' association at Covent Garden tells me something should be done about the buskers in the streets I have a hard time taking it seriously."

Westminster Council is a particular bug-bear. "London is perceived to be one of the most fun places in Europe yet the local council is trying to close it down," he says. "People who spend a lot of money moving into Covent Garden and then expect the fundamental characteristics to be changed should really get a life.

"The market at Covent Garden opens at 5am - it's always been noisy. It's like buying a house on the flight path at Heathrow and then complaining about planes."

The Interpub boss says the man who has just stood him up may also be to blame for Westminster's tough line. "I think licensing was put back when Euan Blair was found pissed in Leicester Square," he says. "I'm sure Cherie had a pop at Tony about that one."

With the hostel business being less than glamourous, Keith is under no illusions about some people's views of Interpub. But the combination of beds and bars is proving hugely popular and with £11m to burn, the future looks bright. "We're the Cinderella of the hospitality industry," he says. "People don't really know what we do. I'm just waiting to put on a big frock and go to the ball - it'll be in a big coach, I can tell you."

Knowles says...​

'I think licensing was put back when Euan Blair was found pissed in Leicester Square.'

'If you can get a Russian talking to an American, talking to a Korean, talking to a Frenchman, all understanding each other, I passionately believe the world becomes