Pubs with rooms - a new trend?

The growth in ‘pubs with rooms’ whether on an independent basis, or as part of one of the pub brands, has been marked. Does this signify a new trend, restructuring of the market or replacing more dated types of accommodation? We considered what new openings and shifting trends can tell us about this emerging sub-sector.

As the hotel market evolves we are seeing numerous new brands emerge but we are also seeing some sectors evolve, one that has caught our attention is “Pubs with Rooms”. There was a time when staying in a pub wasn’t a viable option for the corporate traveller but these “Pubs with Rooms” provide all the facilities associated with a traditional hotel including on site facilities for an affordable price.

If we look back, Premier Inn have been following a similar format with onsite Beefeaters that attract both hotel guests and passing trade, seemingly alleviating the “Can I eat in the hotel restaurant if I’m not a guest?” question by housing the restaurant in a separate building.

GVA have looked at the changing structure of the hotel market and have found that in 2014 pubs with rooms accounted for 6,586 bedrooms, 1.56% of the UK hotel market (for groups/brands with over 200 bedrooms). This has steadily increased to 11,197 bedrooms (2.27% in 2017), with a further pipeline of 497 bedrooms (1.6% of all future bedrooms).

Greene King are the largest player in the market, followed by Marstons and JD Weatherspoons Together these three account for almost 60% of pubs with rooms and are the only three showing further pipeline. With a high proportion of these hotels located in rural locations or along key transport routes they tend to appeal to the transient market, as a result of this, weekends can be challenging.

New brands planned to enter the UK market include The DogHouse hotel & brewery by BrewDog; they recently opened the first hotel in Columbia, USA with the second planned for Ellon, Aberdeenshire.

It appears increasingly popular for celebrity chefs to own pubs and/or pub chains with Tom Kerridge opening the Hand and Flowers in 2005, Raymond Blanc owning a collection of 17 pubs in the south-east, Tom Kitchin with Scran & Scallie in Edinburgh and Heston Blumenthal with the Hinds Head.

We have also seen increasing numbers of independent pubs with rooms coming from emerging from the ‘Gastropub’ space such as St. Tudy Inn which was awarded a Michelin Bib Gourmand in 2017 and The Idle Rocks which was awarded the 2018 seafood restaurant of the year.

With these pubs and gastropubs setting the bar for pub grub we see synergies between pubs with rooms and small F&B led boutique hotels but we also see pubs as a an alternative to restaurants. Examples of food and beverage led boutique hotels include Artists Residence that has grown from one hotel to four, with an average of 15 bedrooms.

We have also considered the impact of increasing supply in this segment, over 50% of hotel closures are in the 2-star sector and we believe that pubs with rooms are replacing some of the traditional economy B&Bs as they are able to compete at a similar price point but with additional facilities. Interestingly 20% of pubs with rooms are in the South East with 15% in the South West; these are the regions that have seen the highest closure rate for 2-star properties (14% and 17% respectively).

Pubs with rooms are a diverse and growing segment and in our opinion offer a viable alternative to limited service hotels from both a developers’ perspective (lower build costs) and a consumer perspective (additional on-site facilities). Each year we are undertaking more Feasibility and concept work in this space and frequently working with food and beverage operators looking to move into the accommodation industry.