Accommodation Pubs: Room to grow trade

It is a truth universally acknowledged that staying in a pub, where a pint of decent beer is never more than a two-minute walk away, is way better than staying in one of those soulless service station people-depositories, otherwise known as a chain hotel.

I declare my bias now. But let's look at the situation from the point of view of a customer. Roughly the same amount of money that it costs for an identikit room in a bland, modern hotel complex will get you a room of character in a comfortable pub, with decent food, drink, and somewhere to while away the evening on your doorstep - literally. The benefits are obvious.

And it sounds like better value to customers too. The past 18 months have seen licensees clearing out their

box rooms and getting out the fabric swatches and paint charts to transform the often large amount of dead space above their businesses into an extra source of revenue. Customers have taken note.

According to Andrew Pumphrey, managing director of room bookings website LateRooms.com, bookings have increased by 40 per cent year on year for inns that use the site. And approximately 200 to 250 new pubs joined the site in 2010.

Tourism and accommodation directory website iknow-uk recently released a statement appealing for more licensees to consider adding letting rooms to their business, citing "huge demand".

Managing director Marcus Simmons said: "We are urging pubs to open up rooms to ensure this business opportunity isn't missed.

"Pub owners are investing so much time in running their establishment, yet they are missing out on extra business revenue by not offering extras such as accommodation, which is in high demand especially from the lucrative family market."

According to Visit England, around 100 million domestic overnight trips are made every year. In 2009 this was worth £17.3bn.

Pumphrey suggests that many pubs are well placed to cash in on their location, especially for business travellers. "Location doesn't matter," he says, "the success of inns is often because there isn't a major hotel nearby.

"The rate is on a par with guest houses and is about 10 per cent a night cheaper on average than a three-star hotel. I think it's fair to say that we find the inns see accommodation as a distant third priority behind food and beverage sales, but with proactive management it can be worth thousands in extra revenue every month to them."

The opportunity is there, and demand is growing. But competition is fierce and finding pub rooms can be challenging for customers. So how do you get your pub noticed above others? As part of a regular focus on accommodation and how you can make the most of it, we're taking a look first at marketing your rooms and getting paying customers through the doors.

The licensees: Ben and Beth Chapman, The Old Bull, Royston, Cambridgeshire

This Greene King pub has 11 rooms but it just wasn't getting the exposure it needed until Ben and Beth took it on six months ago.

Most of the pub's bookings come from business travellers, but it also benefits from wedding trade in the summer, and custom from an army barracks nearby. Direct competition comes from a nearby Travel Lodge and Holiday Inn. "Utilising online bookings is essential," says Ben. "When we started promoting the rooms on the internet, our bookings doubled and we take more bar and food sales too - not to mention conference facility takings."

With rooms offering a 80-90 per cent profit margin, compared to say, a 60 per cent profit on food, accommodation is key to the business.

Since Ben focused his efforts on promoting the pub online, both through its own website which includes clear pictures of the rooms and from which bookings can be made directly, and through accommodation websites such as bookings.com and Eviivo, online traffic now accounts for 40 per cent of bookings.  

The accommodation expert: Candace Jury, accommodation revenue executive at St Austell

Candace joined St Austell from the Richardson Hotel group as the Cornish brewer looked to help licensees and managers across its estate improve their letting room trade. "We see accommodation as a key area for growth in our pub estate for the years ahead and are investing in enhancing our accommodation offer," says St Austell marketing director Jeremy Mitchell.

"For example, we're opening a new environmentally friendly 31-room hotel at the County Arms in Truro and we have a rolling programme of room upgrades across the managed estate."

Since joining the business in April, Candace has increased accommodation revenue in the managed estate by 10 per cent in a period where tourism revenue in Cornwall as a whole was actually down by one per cent.

So how did she do it?

• Make the most of bookings websites: "You pay 15 per cent commission but that's only once you have a booking. It's about using those sites and not just expecting them to work for you," says Candace. "The more availability and discount you show the higher your listing becomes. Use them to fill rooms when you need it. You can pay more commission to push your listing, which I do in winter. Check your competitors, what are they charging? Are they full? I update our listing every other day if I can, which has nearly doubled the amount of traffic to our site. People tend to search for special offers so this will get you noticed. Add discounts for longer stays or free upgrades. We added the Old Success Inn in Sennen, which has 14 rooms, to bookings.com and got nearly £20,000 of bookings in eight months, so it is working. But you have to keep on top of it. If you double-book, it is your responsibility."

• Have your own booking system: "You also need to give people the ability to book direct with you. I don't want to keep paying commission, so the hope is people will then come direct to our website. The smaller managed houses in our estate use the Welcome Anywhere bookings system, which can be purchased from as little as £35 per month. It may save you losing a booking if potential customers can't get through on the phone. It has a customer database which you can then use to send offers to your customers directly."

• Pay per click: "This means that when people search for key words on Google, your website will come up. Google gives free guidance. But you can test different words. For example, the word people often use when looking for rooms in Newquay is 'cheap'. Or as St Austell isn't an especially pretty tourist town I list local attractions like the Eden Project. If there's something near you, use that. Know what your customer is looking for. There is no point using key words like 'luxury', if you're not luxurious."

• Prices: "Work out what is viable, keep an eye on competition and adjust according to demand. We need at least £20 per room to cover cleaning, linen, electricity etc, though we wouldn't go that low."

• Don't be afraid to adjust your prices: "Some of the cost will be there anyway, so it is better to have people in and spending money. People are getting more used to how price fluctuates, like booking an airline. In Newquay at the moment we are doing £29 for room only, but it's a competitive market and we need to get that room filled. Check your availability for the next few weeks. If you have quiet days e.g. Sundays or in between two group bookings, then consider dropping your rates." n