Pub accommodation: room to grow

Adding letting rooms to a pub business can prove costly and create a fair bit of extra work, but, as Sonya Hook found out, get it right and the rewards can be considerable.

Many licensees are wary of the extended hours that adding an accommodation offer may present, not to mention the costs of adding letting rooms in the first place. But those that have made the jump have no regrets — indeed, in most cases, accommodation has helped to boost sales in the pub area too.

"Letting rooms, if delivered well, can offer a supplementary income with decent margins as well as incremental food and drink sales," confirms Scottish & Newcastle Pub Company (S&NPC) trading director Chris Moore.

And the extra hours shouldn't present a problem if the business is approached more flexibly, and more importantly, if there is an efficient management team in place to share the workload.

Bernard Lee who runs the Greene King pub the John Barleycorn in Duxford, near Cambridge, says: "Being flexible is the key to success as well as offering a personal service.

"With accommodation you work longer hours than a pub alone, so you need a committed team — after all, you can't turn guests away when they arrive from an international flight at 1am."

The John Barleycorn is a country inn with four rooms created from a converted barn at the back of the pub. The inn caters for domestic and international visitors lured by Duxford Air Museum and the attractions of Cambridge, as well as business travellers to the nearby Science Parks. His offer, therefore, includes an early breakfast, reasonable room rates and facilities where people can work quietly if required.

Each room has a flat-screen TV and Wi-Fi, which Lee says is an "absolute must" for the business market.

"Accommodation has been a real plus for this business, with guests' friends visiting to eat and business travellers eating and drinking at the pub too," says Lee. "Combine this with our regular trade and it makes a big difference to our profit. The priority for us is to stay busy all year and offer the right package for both tourists and business travellers. Using the web for booking, we've ensured our business has no dry spells any time of the week or year."

Create the right appeal​

For pubs that are in a good position to offer rooms to business travellers, marketing is an important factor, as is creating the right offer — these visitors often aren't just looking for a bed to sleep on.

"Once the offer is right, pubs need to market their functions and letting rooms," says S&NPC's Moore. "They need to think about a good web design, highlighting room and function packages, and work with their local tourist board and businesses."

S&NPC has, in fact, created a brand, INNSPACE, to help its lessees present a more professional image and provide a strong business offer for meetings.

However, appealing to the business market can be successful if you're located in a suitable area, as Lee has found with his Duxford-based inn. But this won't be appropriate for all pubs.

For pubs that are considering opening up their letting rooms, adding new ones or enhancing their existing offer, Punch Taverns' head of property Stephen Allen recommends undertaking in-depth research beforehand.

"What are the levels of tourism and/or business travel like in the area?" he asks. "Is there likely to be a strong take-up? Think about whether you can offer something different from the competition. Is the offer and the pricing appropriate for the area and demographic? How will you market the rooms effectively and what is the expected return on investment?"

Allen explains that there are lots of things to consider before going ahead and converting space into letting rooms, but he also points out that Punch has some great examples of letting rooms that work "extremely well" in both the company's managed and leased estates.

"We always encourage our partners to maximise every inch of their retail space and, for those pubs with letting rooms or the potential to add them, we work closely with our partners to help them get their offer right," he notes. "Where appropriate, we always consider the potential that adding or enhancing letting rooms might add as part of an investment scheme proposal and our team of property managers are on hand to advise partners on such matters."

Hotel competition​

Appealing to as wide a range of guests as possible is the best way of keeping good occupancy levels. It's also important to look at what else is available in the area in the way of pubs and hotels.

It's worth remembering also that, if you are in an area that already has a lot of hotels, you may be able to offer something that some people would prefer.

"Pubs are an attractive alternative to hotel chains as they can offer atmosphere and on-site food and drink," explains Moore.

And one pub that has found success by creating an alternative to local hotel offerings is the White Horse in Brancaster Staithe, which is located right on the north Norfolk salt marshes.

The pub added eight rooms in 1998 — unusually the rooms adjoin the main building but are accessed from the outside, and have access to their own outside seating area.

"They mostly face the wonderful views across the tidal marsh at the bottom of the garden," says managing director, James Nye. "These rooms are dog-friendly, which has been a big attraction as there is access to the Norfolk Coastal Path."

Seven more en-suite bedrooms were added in the main building in 2002, and then last year more than £40,000 was invested in redecorating and updating the rooms and their bathrooms.

The area has a strong tourist trade and so the team at the White Horse provide informative guest packs in the rooms filled with local information about walks, birds seen locally by the RSPB, tide tables, weather reports and a 'What's On' diary.

According to Nye, the accommodation side of the business not only contributes a high margin turnover, but it also generates business in the restaurant and the bar.

The wet:dry:accommodation ratio of turnover is 30:50:20, but with regards to profitability "the accommodation requires very few overheads — just a small amount for a cleaner, laundry and utilities etc".

Having the additional income from accommodation has been particularly useful in the past couple of years for many pubs, including the White Horse, as the financial climate has proved challenging. "The accommodation has provided a helpful and much-needed source of revenue in tough times," agrees Nye.

"The diversity of trade has helped to strengthen the business model and, as such, put the business in a stronger position to weather changes in the market."

Parties and weddings​

For pubs that don't have a natural tourist spot on their doorsteps, linking up a room offer with events can be a good way forward.

And using a pub to hold parties or weddings is becoming more popular in some areas of the country, as people look to find less formal venues that might offer a relaxing yet cost-effective option.

Pubs with a good number of letting rooms are in a strong position to take advantage of this.

"If pubs have letting rooms, but not a dedicated function room, they should consider letting all or part of the pub for a special occasion or even erecting a marquee if space permits," suggests S&NPC's Moore.

One S&NPC pub that has done well with the wedding market is the White Mare at Beckermet, Cumbria, which has bedrooms and function rooms, but also offers a marquee.

In fact, as well as having a strong wedding offer (it is licensed for both civil weddings and civil partnership ceremonies), the White Mare also promotes its marquee for birthdays and other celebrations as well as conference facilities. It can also cater for funerals if requested.

S&NPC also recently invested £2.5m in rebuilding the George at Hatherleigh, Devon (recently leased by Urban & Country Leisure) with 15 letting rooms. The pub website promotes the possibility of leasing the whole pub with its po