Think about accommodation, licensees urged

Licensees are being urged to "seek alternative income streams", such as accommodation, to offset the threat of the downturn in the economy.

Speaking after the launch of Christie + Co's Business Outlook event, Neil Morgan, director and head of pubs, called on publicans to assess the potential revenue from offering letting rooms.

"Whatever happens this year the great British pub is here to stay," he said. "But people will have to adapt and find alternative income streams, such as accommodation."

Morgan admitted the smoking ban and "other challenges" would claim victims this year, but added that pubs have always responded well to changes and "we don't doubt they will continue to do so".

Pub closures in recent years, he added, were "simply due to changing demographics, social trends and the strong appetite for pub sites among developers", not just the smoking ban.

Christie + Co also predicted that a lack of stock would continue to drive freehold prices. It also said leasehold prices would rise due to the lack of freeholds.

The agent predicted that a "vibrant second generation lease market" will be created as licensees and operators pursues lease opportunities as well as freeholds.

Meanwhile, pub values rose by 6.5 per cent in 2007, according to Christie + Co's average price index.

Morgan added: "Although this increase is modest compared with the 8.5 per cent increase we witnessed in 2006, it is still moving in the right direction and demonstrates the pub market's ability to continually adapt to the challenges it has faced over the past few years."