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Popularity of British Pub-Hotels Surges as Properties Drive Food-and-Beverage Revenue

Hoteliers Emphasize Quick Check-In for Guests, Need for Versatile Employees
Fusilier Inn with pub and beer garden at 652 Harrow Road in Wembley, outside London. (CoStar)
Fusilier Inn with pub and beer garden at 652 Harrow Road in Wembley, outside London. (CoStar)

Following many months in which United Kingdom pubs were closed due to the COVID-19 pandemic, accommodations and food and beverage in these British hospitality icons are once again providing their unique, warm hospitality.

Companies with pub-hotels — also known as “pubcos” — own and manage assets that often compete with budget and midscale brands, especially in rural UK locations, panelists said during “Raising the Bar: Pubs Pulling Hotel Guests" at the Annual Hotel Conference in Manchester this October.

From left: Kevin Charity, of The Coaching Inn Group; Sean Donkin, of The Inn Collection Group; Sophie Johnson, of WH Brakspear & Sons; and Simon Johnson, of CBRE, discuss the United Kingdom's pub-hotel sector at the Annual Hotel Conference in Manchester, England. (Terence Baker, CoStar)

Simon Johnson, senior director of United Kingdom pubs at business advisory CBRE, said pub-hotels are one of the fastest-growing lodging sectors in the UK. The segment benefits from huge consumer demand to experience classic British hospitality with excellent food and beverage with their rooms immediately upstairs.

Great food and beverage drives rooms' revenue, panelists said. Sophie Johnson, senior operations manager at WH Brakspear & Sons, said most guests who have stayed at her company's hotels dined at them, too.

WH Brakspear has seven pub-hotels and has just bought an eighth, which is a manor house undergoing refurbishment. The firm also claims one of their hotel-inns is the oldest in the UK, dating to 780 A.D., although over a dozen pub-hotels around the UK also claim they're the oldest inn in the country.

Sean Donkin, managing director of The Inn Collection Group, said pub-hotels drive revenue most hours of the day.

“The ancillary benefits come from having an asset that trades for 18 hours a day, not just 10,” he said.

Donkin, who belongs to the founding family of Bourne Leisure, has 29 hotels and approximately 1,300 rooms in his portfolio.

What's the ideal size of a pub-hotel? For Kevin Charity, CEO of The Coaching Inn Group, part of the Redcat Pub Co., the smaller the better. The Coaching Inn Group manages approximately 1,000 rooms across 32 hotels.

“We specialize in coaching inns, between 20 to 30 rooms, which seemed to have been ignored by the larger players,” he said, adding 70% of his revenue comes from food and beverage.

Sophie Johnson said WH Brakspear's largest pub-hotel has 28 rooms, and the company's larger properties achieve 40% of overall revenue from rooms, while the smaller ones generate 30%.

Donkin said his strategy is slightly different.

“We have properties of between 12 and 100 rooms, with a focus on prime assets in towns and cities. We do have strong [food and beverage], which is determined by location," Donkin said. "The mix is now leaning more to rooms, but once developed we push [food and beverage]. People [coming to such hotels] spend more time in an inn’s lobby."

Skill Sets

The panelists said the skill set needed to run a pub-hotel with strong food and beverage is not always so easy to find.

Sophie Johnson said The Frogmill, a hotel in Andoversford, in England’s Cotswolds, brought with it some growing pains finding the right property leaders.

“When we opened Frogmill in 2018, we needed a [general manager] with hotel knowledge, as [the property’s operation] is multifaceted," she said. "You just need more skills to look after this. We went in a little blind, but it is now our most profitable site."

Charity acknowledged his company has also seen its share of learning experiences.

“Every time we hired a hotel manager, they have generally failed," he said. "We need that overall ability. We take a lot of the hotel administration away from them so they can concentrate on the hotel itself.”

A better fit for pub-hotels might in fact be pub managers, whom Donkin said he has targeted to run his properties.

“To my mind, the hotel sector is prohibited by cross-training and the number of rules they have,” he said. “People want their keys and then to be pointed in the right direction. It should take no longer to check in than it takes to pull a pint."

Staffing pub-hotels remains a challenge just like it is in the broader hotel industry, so it's key to develop sound retention strategies, panelists said.

“We’ve seen the staffing challenge settling down, as there is some fear out there that now is probably not the right time to change jobs,” Charity said. "We have a great team, and we’ve created an online upskilling program, which is one of the best things we’ve done in the last few years."

Donkin, whose hotels are in England's Lake District, said the region has great talent but that it is not loyal.

“There are no companies here that have the critical mass to show that whole careers can be looked after,” he said, adding one of his company's initiatives is to provide quality staff accommodation.

Demand for Events

Events and weddings are returning to pub-hotels, but not everyone wants them despite the pent-up demand and opportunities for some profitable weeks of business, panelists said.

Charity said 60% of his sites have wedding facilities.

“But we make clear we are not a wedding venue. We love a wedding, though, as it can turn a good week into an excellent week,” he said.

Sophie Johnson said of the three venues she has with function space, those facilities make up one-third of revenue.

“We’re in rural and coastal venues, and as wedding demand has merged this year from the previous two years of COVID-19, you do need the right teams in place," she said. “It is hugely profitable if done right."

Donkin said weddings, or at least the idea of hosting them, leaves him scared.

“We do food, booze and rooms. Events scare me. Zero functions,” he said.


Hoteliers who lead pub-hotels work hard on gaining direct bookings, but online travel agencies (OTA) remain part of the mix, panelists said. The ratio of OTA bookings to direct bookings is between 40% and 50%.

“We’re starting a loyalty scheme, and that scares me as I want to get it right and not just have points, but I have no issue with OTAs," Charity said. "Yes, some things about OTAs are irritable, but, ultimately, we pay a fee, and we get a result.”

But there are ways to get the most out of the OTA relationship, Donkin said.

“Commission is something we can measure, and while acquisitions [with OTAs] are more costly, the marketing is not. We just make sure we capture guest details when they are on site,” Donkin said. “We, too, are thinking about loyalty, but the key is how to do it properly, and another question is, do people care?”

In the UK's rural areas, hotel average daily rates (ADR) trend higher.

“If there is more of a leisure component — lawns, countryside — then the higher the ADR," Donkin said. "You are on a quick learning curve when you are isolated, but I do not think [guests have] the view an inn is a cheaper accommodation option. It is about value for money. What we’re seeing is that our premium rooms are going first."

Sophie Johnson said her experience is that in terms of ADR, “entry-level rooms are about where they were last year; higher-end rooms dropped a little."

“Revenue management is a dark art that we are learning more and more about. We do not want to drop [ADR] too far and destroy the brand we’ve built,” she said.

Donkin joked that the last thing he wanted was to vary ADR too much and have guests openly chat about what they’re paying, or not, to others, over a beer or glass of wine.

Another revenue generator that has emerged from the pandemic is the pet fee.

“Ten percent of our guests bring dogs, and the teams love having them,” Sophie Johnson said.

Donkin added guests who bring pets are willing to spend to have them during their stay.

“We’ve looked after dogs since 2008, and the premiumization from those guests is massive,” Donkin said. “They spend a fortune on them. Full meals for dogs."

Charity said one of his hotels, in Maldon, Essex, even has a dog concierge.