Fuller, Smith & Tuner hailed the benefits of its “balanced” estate, with its hotels delivering a boost to results after a summer of staycations.
The company said that it was “vital” for hotels to fully reopen soon, for “the significant role they play in the emotional wellbeing of our customers and our teams”.
Reporting results for the 26 weeks to 26 September, the company said that it had seen successful trading from staycations in its hotels and pubs with rooms - particularly in popular tourist destinations - with occupancy levels of 79%.
During the period it completed the integration of Cotswold Inns & Hotels, which it said had delivered “immediate benefit”, with like-for-like sales in its managed pubs and hotels for the 34 weeks to 21 November at 69% of prior year.
The group said that “high consumer confidence in our premium pubs and hotels is expected to lead to strong demand as we reopen the estate in a safe and steady manner”.
In October 2019 the group acquired the seven-strong Cotswold Inns & Hotels for £40m. Cotswold Inns & Hotels was founded in 1997 and, in the year to 30 September 2018, the properties being acquired generated revenue of £17.5m and site Ebitda of £3.4m with a gross asset value of £31.5m.
Simon Emeny, CEO, said: “In the short term, we need clarity of message and a clear roadmap out of the coronavirus crisis. We know we can play a major role and we relish the challenge of doing so. Should the Chancellor need any further encouragement, the net tax deficit from Fuller's alone for the first six months of the year is over £70m. The country needs pubs, restaurants and hotels fully open - and soon - for the financial contribution they make, the jobs they create, and the significant role they play in the emotional wellbeing of our customers and our teams.
“As lockdown comes to its scheduled end, it is important to note that there have been incredibly low levels of infection recorded across pubs, restaurants and hotels. It is vital now for the mental wellbeing of the nation that people are allowed to meet and socialise in a responsible manner, in the safe environment that pubs, restaurants and hotels have proved they can provide.
“The purchase of the Cotswold Inns & Hotels business could not have been more timely and during August and September, five of our highest turnover sites (and three of our most profitable) came from this part of the business.
“When we acquired the Cotswold business just over a year ago, we believed that we could add value to an already successful business by building more local trade and increasing the revenue from food and beverage sales to those who lived locally or within driving distance. The venues were famous for their wedding trade and this was one of the key sources of revenue.
“The possible outcome of so many weddings being cancelled could have been a problem - but a successful, targeted, digital staycation campaign and the widespread growth in domestic tourism have resulted in the Cotswold business outperforming its sales from the prior year. We will, in future, use the data we have captured and creative and innovative marketing to build on this staycation trend. In addition, the restaurants have outperformed our expectations and provided a welcome reminder that this delightful business is a perfect fit for Fuller's and our customers.”
Fuller’s has not been the only pub company to have expanded its estate in recent years, with Marston’s now up to an estate of 60 sites. The group described itself as offering premium budget rooms in a market which it said was projected to grow and where branded operators would continue to take share from independent businesses and where Marston’s could benefit from its position as the market leaders in new-build pub development.
The company planned to expand its estate from over 1,500 rooms to more than 4,000 in the medium term.
A study from RPBI said that, for the same spend on accommodation in the same area, in 2016 48% of consumers said they would rather stay in a pub, rising to 53% of those polled in 2019. Of the reasons given for staying in a pub, over half agreed the food was better quality and nearly three quarters said the food was better value, while the majority said the pub had a better atmosphere than a hotel.
Insight: Fuller’s is one of those most unusual of companies - it has a lengthy history, being founded in 1845 as a brewer - but has remained nimble. Did you know that, until this summer it owned The Stable, a 14-strong craft cider and gourmet pizza restaurant business? Probably not, and visiting any of the venues wouldn’t have left you any the wiser as Fuller’s branding was not plastered all over them.
The company decided a few years ago that it could be making more of pubs with rooms and, given the tradition of coaching inns, it was well within its rights. The joy of pubs with rooms is that most pubs have them lurking away upstairs, you just have to slap on a lick of paint.
In Fuller’s case, it decided to go down the road of boutique and has found itself competing very successfully indeed, with aspirations to grow. With a warm pub welcome built in - and practised F&B - it’s easy to keep guests onsite and use that heritage to teach hotels a thing or two about service.