The former Admiral Taverns chairman and ex-director of Punch said the industry is approaching a new cycle with renewed optimism about the prospects for tenanted pubs.
Paveley, who is now chairman of Hook Norton Brewery, said managed estates faced the challenge of not appearing formulaic while tenanted pub companies needed to match the skill levels of managed staff.
Speaking at last week's Tenanted Pub Company Summit, he said: “Within my relatively short career of 15 years we have operated through three very distinct cycles. Does that tell us whether we’re coming up to another change? I think there are signs of that being the case.
“We need to reappraise the virtues of tenanted pubs and be more honest about some of the weaknesses with managed pubs.
Stabilised
“The tenanted model seems to be stabilising in terms of profits and like-for-like income – and I think for me that is an indicator the cycle is starting to balance out.”
However, he said the industry faced many challenges, not least the threat of being used as a “political football” over a pubco statutory code.
“There is still a misunderstanding about the tie and the merits of that model. I am a huge believer in the tie – it is really important and sustained many pubs in this country.
“It is an area that is very easy for politicians to kick over. We all know parts of the industry were not whiter than whiter around 2007. Part of that has left a legacy of mistrust between the various parties of the industry when we should all be working together.
“Certainly the industry is holding itself up to scrutiny and being honest about its problems. But those problems are largely yesterday’s. If the Government is going to intervene it should have done it in 2004 when the industry was running rampant. Largely I would argue the market has solved or is solving the majority of these arguments.”
Investment
Paveley said the formula to success for tenanted pubs ultimately lies in investment.
He said: “Investment needs to generate free cash over the life cycle and that is the name of the game.
“Both managed and tenanted pubcos can do this but ultimately I think we are going to see more hybridisation between the two. We’re going to see tenanted pubcos getting more involved with raising licensee expertise and the managed pubcos are going to have to find ways of breaking out of formulaic straight jackets.
“The future for our industry is trying to combine the merits of both and not just focussing on one at the expense of the other.”