Room at the inn: why pubs with rooms are gaining ground

Accommodation also gives customers more reasons to visit and help pubs trade more consistently throughout the week.

Groups including Coaching Inn Group, Heartwood Collection, Chestnut and Butcombe are investing in accommodation as operators look to build destination pubs capable of capturing spend across multiple occasions.

The trend comes as new Lumina research found pubcos were moving away from expansion based primarily on scale and towards estate quality, targeted investment and stronger individual site performance.

Lumina said operators were increasingly segmenting estates around clearer food, sport, community, accommodation and experience led roles, with better funded businesses using acquisitions and pubs with rooms to strengthen their portfolios.

For operators, the accommodation attraction extends beyond bedroom revenue, with rooms helping generate resident food and drink spend, improve quieter trading periods and create a more balanced revenue mix.

Destination focus

Coaching Inn Group, formerly RedCat, has placed accommodation at the centre of its strategy and now operates more than 1,200 rooms across 43 inns, hotels and pubs with rooms, with average occupancy of around 80%.

Managing director Adam Charity told the Morning Advertiser (MA) that the focus reflected both the group’s experience in the market and where it saw long term opportunity.

“Today’s guests are increasingly looking for authentic experiences, characterful places to stay and destinations that offer more than just a bedroom.

“They want somewhere that provides a genuine sense of place, and our inns are well positioned to deliver exactly that. Quality food and drink are equally important within this, as guests increasingly expect accommodation and hospitality to work seamlessly together.”

The group has also segmented its accommodation estate further through Classic, Premium and Signature collections, while allowing individual sites to adapt their food, drink and events offer to local demand.

Chestnut founder and chief executive Philip Turner told the MA that accommodation provided greater stability through a combination of room revenue and “guaranteed resident covers”.

The group, which won Best Accommodation Operator at the Publican Awards 2026, operates 22 pubs with accommodation and 408 bedrooms, with accommodation contributing 44% of group profit.

Average occupancy stands at 75.9%, with an average daily room rate of £145.

“Accommodation without food would not work, food without the bar would not work and, unless you are in a high footfall urban environment, a bar on its own does not work.

“Each area relies on the others, and whilst the margins on accommodation may be higher, we use this to support the higher costs associated with the food and beverage business.”

Chestnut invested more than £1.5m in its accommodation offer during the past year, opening four new accommodation sites, adding six bedrooms and refurbishing more than 50 rooms.

Turner added accommodation also helped pubs trade more consistently throughout the week by creating additional food and drink occasions around overnight stays.

Commercial benefits

Heartwood Collection chief executive Richard Ferrier also pointed to the margin benefits of accommodation as a reason for the group’s rapid expansion into pubs with rooms.

“Rooms are great because the labour cost attached to the sale of a bedroom is much lower as a proportion. For every room you sell, you bring the labour percentage down for the company.”

Heartwood’s trading accommodation estate is running at more than 80% occupancy, with average room rates above £150 and revenue per available room above £120.

Food and beverage sales across its pubs with rooms are also around 60% higher than at its regular pubs.

“You have this captive audience staying in the pub that can really drive the non peak days in F&B. Monday to Wednesday are the busiest days. You go in and it is almost like a Saturday night.”

However, Ferrier stressed accommodation could not compensate for a weak underlying pub.

“If we would not do it as a standalone pub, we will not do it just because it has rooms. It has to be a great pub first and foremost, and then the rooms are the cherry on the cake.”

The group is now hoping to grow to 1000 rooms, having almost reached its 500 bedrooms by 2027 target.

For Butcombe Group, rooms form part of a wider strategy focused on destination visits, weddings, celebrations, events and premium food and drink.

Chief operating officer Jayson Perfect said consumers were becoming more selective about where they spent but were still willing to pay for occasions that felt worthwhile.

“Increasingly, customers are looking for experiences that feel memorable, offer affordable luxury and are special enough to justify the occasion.”

Butcombe recently reported 5.2% like for like growth across its managed pub division, alongside growth across food, drink and accommodation, while wedding revenue increased 37% year on year.

“Accommodation allows guests to turn a meal, event or celebration into a stay, increasing dwell time, deepening spend and strengthening the emotional connection with the venue.

“For operators, rooms also provide a more balanced revenue mix and help a site trade as a true destination rather than relying solely on passing footfall or single occasion visits.”

The strategies point to accommodation becoming more closely integrated with the wider pub offer, with operators using rooms not only to add revenue but to support food and drink sales, improve weekday trading and give customers more reasons to visit.