Hive of activity at Honeycomb Houses

Pubs have been hitting the headlines yet again with closures accelerating as wet-led venues face the prospect of the £8 pint and food-led businesses struggle to secure ingredients at anything like affordable prices.

Frogmill, Shipton Oliffe

But there remains a sweet spot in the market – pubs with dining and accommodation – and the Brakspear-owned Honeycomb Houses has a firm focus on this healthy sub-sector. The family-owned business comprises nine managed houses that meet the brief of larger sites in rural locations and market town in the South East and Cotswolds, with a strong food trade, event space and bedrooms.

Although Tom Davies, CEO of Brakspear, says the company is still committed to its tenanted pubs – that number around 110 – there was a need to bring its larger properties with £1 million to £1.2 million annual turnovers under the Honeycomb Houses umbrella and run them to a certain set of standards and with central support for occurrences such as losing a manager or chef.

Tom Davies, CEO of Brakspear

Visiting the Frogmill pub in Shipton Oliffe near Cheltenham on a recent trip highlighted the very attributes Honeycomb is advocating as it consists of a historic stone-built pub with dining room sitting in extensive grounds surrounded by countryside and housing 28 bedrooms along with space for weddings and events.

The major investment in the property in 2018 contributed to the £35 million that has so far been spent on the Honeycomb estate. This has helped them hit the minimum weekly sales target of £40,000, which equates to around £2 million per year and an expected profit of £500,000 annually.

Across the nine-strong portfolio food accounts for 50%, drinks 30%, and rooms 20%. Although the latter is relatively small it will be a significant contributor to the former as most guests at such properties partake in the food and beverage aspect during their stay. The regular resident element also maintains a buzz around the pubs.

Davies suggests the buoyancy in this part of the hospitality market is a result of “pubs with rooms now regarded as a viable place to stay, with the UK seen as a credible destination for family holidays”.

Porch House, Stow-on-the-Wold

The Honeycomb pubs that include the Sheep on Sheep Street and Porch House in Stow-on-the-Wold, George Townhouse in Shipston-on-Stour, and The Chequers in Marlow highlight the high quality offering, with weekend room rates at £160-220 and quieter weekdays not going below the £100 threshold. Proof of demand at this end of the market can be seen from the occupancy levels that average 95-97% across the estate.

To hit these numbers Honeycomb is working with the likes of Stay in a Pub and more recently experimenting with influencers – selected individuals with 10,000-15,000 followers on the relevant social media channels.  

This engagement has helped David Nathan, CFO of Brakspear, reveal figures for this year hitting pre-Covid-19 levels with a £17.5 million turnover across the group and profits of £4.5 million. “We want the next generation of the family to be proud and with an annual 10% return for shareholders they’ll be very happy,” he suggests.

To keep things moving along the challenge will be to identify new properties that fit the Honeycomb criteria. “The opportunities will be unplanned and we could do one or two a year. We’re not able to do 3, 4 or 5 per year. New sites will be few and far between so the geographic expanse will increase,” says Nathan.  

Bull on Bell Street, Henley-on-Thames

This part of the market also comes with a batch of operators looking for similar properties and among the competitors, according to Davies, are Young’s, Fuller’s, McMullen, Charles Wells, Liberation Group and Shepherd Neame.

Despite the competition there is much evidence of the push forward by Honeycomb. For starters there is the recently completed major refurbishment of the Bull on Bell Street in Henley-on-Thames, which included adding nine bedrooms. Further projects are planned – including the 28-bedroom Egypt Mill in Nailsworth near Stroud that was purchased in 2020 and is about to receive a major investment.

Likewise at Ghyll Manor, near Horsham in West Sussex, which was bought in April and will undergo a major transformation from a hotel to a Honeycomb House. “We’ll make it more approachable and from 28 rooms we’ll move it to 40. It will reopen next summer,” says Nathan.  

Glynn Davis, editor, Beer Insider