Top tips on optimising your letting space

Ideally, tenants looking to introduce letting rooms should do so only when their core pub business is operating well. Unless it is done properly, the introduction of rental rooms will place an added burden on the publican, staff and finances. Great accommodation will encourage guests to use all of the pub while generating real incremental spend. Poor room standards will, of course, deter those who are staying from eating and drinking at the pub. The whole offer has to be aligned and work in harmony.

Hoping the spare rooms will save cash flow can lead to disaster when the set-up and operating costs are taken into account. Seek proper financial advice beforehand, and produce a realistic, accurate profit and loss estimate for your proposed business, remembering to factor in the all-important seasonality aspect.

There are many considerations when deciding to rent your spare rooms. For us at McMullen, the most problematic has been the need to separate the publican’s accommodation from the letting rooms.  It’s easy to say you don’t mind sharing space, but the reality is often very tricky.

On top of that, the pub’s location (rural pubs will rely heavily on online bookings), room capacity at other establishments in the local area, the size of rooms available in your pub, separate entrances for  those using the pub and those staying in the rooms, and utility set-ups (particularly hot water and heating) will all need to be considered.

Regulations​

Health and safety legislation is much more onerous if letting rooms are introduced. Anyone looking to rent will need to comply with fire regulations, which could include the introduction of a costly full fire detection and alarm system. Fire exits and means of escape, fire retardant materials and the introduction of fireproof doors and so on need to be considered. In addition, the regulations regarding houses in multiple occupation add further costs and requirements.
Another consideration would be the style of operation. We have some pubs letting rooms with shared bathrooms, but they match the style of the business, with guests being charged accordingly and not expecting en-suite facilities. Other pubs may need to have en-suite rooms in order to meet the needs of the type of guests they cater for effectively.

Offer​

Breakfast or no breakfast? This question is always a tricky one to answer, because the cost implications are huge. Again, the style of room available should dictate the offer. If the rooms are priced exclusive of breakfast due to staffing restrictions, perhaps a dinner and bed offer may be appropriate.

And, of course, it’s vital to consider how you are going to fill your rooms. Bear in mind that midweek occupancy levels are often better than weekends. Doing your homework on the local area before making any decisions is critical. You need to consider social media, digital advertising and PR to drive enquiries to your website. You also need to think about offering online booking, which is now a priority for many customers. I advise anyone to form good relationships with the local tourist office. Rambling, horse riding, car, outdoor pursuit and cycling associations are all potentially valuable partners. You may decide to use online booking agencies, but bear in mind they take a percentage of your fee. 

On average you should be looking to invest about £5,000 per room, but this can vary widely if additional bathrooms, plumbing, fire alarm systems and structural work are needed. Consider daily running costs too — if laundry is done in-house, you will need to invest in machines and equipment, and if you outsource, storage space for laundry will be needed.

Case study​

The tenants of the Dog & Whistle in Hertford (formerly the Ram) have partnered with McMullen to complete a joint £275,000 investment, with the opening of its renovated rooms.

Owners Yvette Wheeler and Ricky Harding first opened the doors to the new look pub in November 2013, and have now completed its transformation with the opening of five boutique rooms above the outlet. They are minimalistic in style, with comfy Scandinavian style sofas and decorations.

Wheeler said: “Now that the rooms are finished our dream pub is complete. It is great that we have been able to bring something different to Hertford, and the locals have been very supportive. Everyone at McMullen has been fantastic in giving us such freedom to be creative with the pub and its offering."

Fergus McMullen, production and sales director at McMullen, said: “This uniquely styled pub is a fantastic asset to Hertford. The rooms now look incredibly stylish and I’m sure they will help bolster Yvette and Ricky’s trade in the town and make it even more of a destination pub for visitors to the area.

"We’ve loved working with them to create such an individual, eclectic venue. We’re always keen to invest in great tenants to maintain the competitive advantage our tenancies enjoy, and are sure The Dog & Whistle will be a real success.”

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