Stay In A Pub, Hotel Analyst

Pub Accommodation | Posted 2017.06.30

Fuller, Smith & Turner said that accommodation had been a “standout performer” over the past year, with the company continuing to expand.

The pubs-with-rooms sector is currently growing, despite the decline of the wider pub sector, driven by a rise of staycations, but also picking up on the consumers’ search for experiences.

At Fuller, Smith & Turner, the company reported results for the 53 weeks to 1 April, with CEO Simon Emeny commenting that; “While food has continued to show strong like-for-like growth of 4.5%, accommodation has been the standout performer over the last 12 months, with like-for-like sales rising by 6.4%.

“This was driven by a strong rise in occupancy rates, benefiting from both an increase in inbound tourists, many of whom like to stay in a traditional British pub, and a rise in the popularity of the staycation.”

The company added a further 71 rooms through the acquisition of new properties and building more in its existing estate, taking it to 706 rooms, adding 36 after the year end on three new sites and with aspirations to add more.

The group does not see itself as the cheap option compared to hotels. Jonathon Swaine, the company’s managing director, Inns, told Hotel Analyst: “We’re trying to go to a premium in every market that we’re in, we don’t want to compete with the budget market. Our offer with food and drink is at a premium and we want to pair the rooms with what is downstairs. We base ourselves in Chiswick and there are certainly cheaper places we could be, but it’s as much a philosophy as a necessity.

“We’re a small player, we can’t compete on price, so we need to develop niches. We have stylish individually-designed bedrooms.

“In London we have a mix of business and leisure guests. It’s more balanced than you might imagine, we’re seeing people who would stay in a central hotel stay in our pubs. You tend to attract people who are seeking something different, an experience. You get the more adventurous guests.”

When asked whether, as at Premier Inn, a brand owned by another, albeit former brewer, Swaine said: “Airbnb is a great proposition, it’s got a place. Our business is too small to feel the ripple effect. All our pubs have the ability to express themselves locally and reach out into the community. People don’t want to spend their money with faceless entities.”

Fuller’s sees its customers booking direct, but also through third-party intermediaries. It does not release the split, but Swaine said: “The OTAs make it very easy for customers to book and that’s a good thing

The company said that, nine weeks into the new financial year, it had seen a “very strong start”, albeit against its softest quarter last year, with like-for-like sales in managed pubs and hotels up 6.6%.

Also operating at a premium is Young’s, which has 23 hotels and pubs across the UK, based primarily in London but stretching out to the west, including spots in the Cotswolds and the West Country. At the company’s most-recent half-year results it said that half of its 487 rooms were now “of boutique standard”. Occupancy across the estate was up 1.3% to 78.6%, with revpar maintained at GBP63.80, compared with tough comparatives created by last year’s Rugby World Cup.

Stay In A Pub, a sister company of beer accreditation body Cask Marque reported that, between 2013 and 2016, the number of pubs with rooms in the UK had risen 4% despite a declining overall pub market and they are popular with guests – 48% of respondents to the survey said that they would rather stay in a pub than a branded hotel (27%), and this has risen from 41% in the three years.

The group told us that there were over 6,000 pubs with rooms (excluding hotels) with more than 50,000 rooms and a turnover in excess of GBP800m. Of those, Paul Nunny, Cask Marque director, told us that there were “very few branded. JD Wetherspoons have 50, Fuller’s have only 30 and there are many small groups of 10”. Of those sites, he said that 21% intended to add more rooms and 64% were undertaking refurbishments in the next 12 months.

Of those staying in the pubs, 63% were bookings from tourists and the leisure market, with 37% of pubs having between 11% and 20% of customers from overseas. As Swaine noted, the OTAs were playing a role in booking – 65% of customers prefer to book their accommodation online – with 35% of pubs asked paying 16% to 20% commission.

HA Perspective [by Katherine Doggrell]: Pubs with rooms have been offering up their wares for as long as hotels, with weary highwaymen casting off their sweaty leather hats and collapsing into a bed after a restorative jar.

Sweaty leather aside, the pub sector has been evolving in recent years and, with it, the rooms which are alongside. When a premium is being paid in a gastro pub, adding a room and making a weekend of it turns it into an event and much is written in these pages of how experience is all. And finding a location on this sceptred isle rather than running the gauntlet of the falling pound is an added pleasure.

Much of what Fuller’s Swaine said echoed the current sales pitch from Airbnb, unexpected given that the pub company was founded in 1845. Just as AccorHotels’ chairman & CEO Sébastien Bazin is berating his hotels for not being a part of the community (cue the third pillar), pubs have always been at the very core of the community in the UK.

Elsewhere in this issue we hear that the tide may be turning on the sharing economy, as it damages the communities it operates within. Are pubs set to become the Airbnb it’s OK to like?