Now is the time for pubs to add rooms

When staying in York recently for a leisurely weekend away with my mother, we very much hit the sweet spot when dining at the lovely Bow Room restaurant near the city’s imposing Minster, because it sits within the charming confines of the Grays Court Hotel.

Because of the sheer convenience and invariably attractive ambience of restaurants with rooms, they have long been our ideal scenario for a short break. Our Yorkshire foray followed stays at various venues around the UK including L’Enclume in Cartmel, Read’s in Faversham and Gravetye Manor down in Sussex.

Such a model can work extremely well, because if the food is of a sufficiently decent standard and people are prepared to travel to dine, then the rooms can be a great additional revenue generator. It’s a captive audience to some extent, and the return on investment can be incredibly powerful. This was long ago recognised by Tom Kerridge when I visited him in the early days of the Hand & Flowers in Marlow, when he was adding his first couple of rooms. The fact he now has 15 spread across various properties in the town says it all.

Supporting this view is Michael Wignall, who recently stated that it is the rooms at Michelin-starred The Angel in Hetton, Yorkshire, where “the money really is”. He can now reflect on the fact that, having properly invested in them, it has proven to be absolutely the right thing to do. The 15 rooms are enjoying high occupancy rates all year round from people dining in the 50-cover restaurant. The accommodation is such an attractive proposition to the overall business that an additional five rooms are being added in a site over the road that was originally destined to be a sister restaurant, Cove.

Since covid-19, there has been a surge in people booking for multiple nights away, and Wignall now creates bespoke menus for such guests in order that they do not have to eat the same meal on consecutive days. The buoyant scenario at The Angel reflects a buzzing situation in the general accommodation sector, with strong demand driven by people on staycations. Average daily room rates have climbed to £122.86 in the second quarter of this year, representing a 70% increase on the first quarter, and revenue per available room (REVPAR) has jumped to an all-time high of £98, according to BNP Paribas Real Estate. 

With the post-covid-19 staycation boom looking like it will hold up for many businesses, this has given sufficient confidence to a growing number of people to commit to adding rooms to their restaurants and gastropubs. In recent weeks, we have seen Oliver Brown, founder of Duck Goose restaurant in London, open Updown, in Kent, as a restaurant with seven rooms to great acclaim. First Restaurant Group is also continuing its expansion of the gastropub with rooms concept with the opening of Oak & Poppy (formerly The Rosslyn Arms), which joins FRG’s three other food-led pubs with accommodation in the capital, while newcomer Vices in York consists of three high-end suites designed with a wine narrative that sits alongside the Allium restaurant. 

The growing interest in the dining-with-rooms model bodes well for the owners of one of London’s finest gastropubs, The Bull & Last in Kentish Town, which has finally completed, after pandemic-related delays, a massive overhaul of the pub’s infrastructure, which now includes six extremely smart letting rooms located above the pub space.

Admittedly, much of this activity is based around highly acclaimed dining rooms – whether in restaurants or pubs – but the action is not exclusive to this end of the market. The rapacious ongoing expansion of The Coaching Inn Group by owners RedCat Pub Company highlights a broad demand for the dining and kipping combo. It recently purchased the famous The Jamaica Inn in Cornwall, taking the business to 32 sites, which represents a doubling of its footprint of pubs with rooms in the past 12 months, and it shows no signs of stopping. 

Martin Harley, of London Village Inns, is also currently kitting out 12 letting rooms above his new acquisition, The Black Lion in London’s Kilburn area, having enjoyed the financial upside of offering boutique rooms at two of his other pubs. With demand for domestic accommodation looking to be on an upward trend, now could be the time for pubs and restaurants of all varieties to at least investigate the potential of adding rooms to their mix. It could be just the boost their underlying businesses so desperately need in order to juice margins in what looks set to be a tough ongoing environment.

Glynn Davis, editor of Beer Insider 

This piece was originally published on Propel Info where Glynn Davis writes a regular Friday opinion piece. Beer Insider would like to thank Propel for allowing the reproduction of this column.