Letting out a few B&B rooms is an obvious way to expand what a pub has to offer — but what about diversifying into the booming youth hostel sector?
Offering hostel rooms can be a complicated business and one that requires the right location, offer, licensee and staff.
Gone are the days when you could just set up a load of bunk beds and wait for the bookings — the current generation of backpackers are much more demanding than that. And while backpackers can bring an energy to the business, you may not be keen on having rafts of young guests descending on the premises at all hours.
One of the big players in this sector is Beds & Bars, which has 19 venues across Europe including London, Cardiff, Newquay, Bath and Edinburgh. Its core market is 18 to 35-year-old backpackers.
Not so spartan
Sites offer a range of different-sized dorms, as well as some private rooms, with prices starting from as little as £12 for a bed in the off-peak season.
While hostels offer great value for money, Ben Kelly, group head of marketing at Beds & Bars, says traveller expectations have grown, with free Wi-Fi and continental breakfast, as well as security and privacy, becoming increasingly important.
"There are a lot of solo travellers out there who want to know their belongings are safe," Ben says.
The operator has introduced privacy curtains, key cards and lockers, as well as capsule beds in dorm rooms, to cater for these requirements.
Having the hostels on site with a pub and bar offer works well for the businesses. As well as providing a social environment, it gives an opportunity to upsell on food and drink items, which residents receive at 25 per cent discount.
"The reason our bars work so well is
because of our social element, as backpackers want to meet each other," he says.
"Our pubs are traditional and they are attractive to backpackers as they come and want to see what a pub feels like."
It's a similar story to the success of one of the newer players in the market, PubLove.
PubLove signed a deal with Ei Managed Investments to open hostel pubs in sites across London. The accommodation now contributes 40 per cent of sales at its five venues, which have between 65 and 80 beds a site. It is about to open its sixth site in London Bridge and has three more sites set to open by the end of the year.
Mark Gibbons, head of accommodation at PubLove, says one important part of the jigsaw is location. "You want easy transport so the backpackers can literally just get off the Tube or at a bus station and have a five or 10-minute walk, if that," he says.
The more the merrier
"First of all they are looking for cheap accommodation because they are here to explore the city. The other thing with the hostel experience is meeting new people. It is that social thing and that is why people don't mind sharing with 10 other people in a room."
Since opening its first site — the Green Man in Paddington — Mark says PubLove has had to adapt its services, adding reading lights, USB charging points and wet rooms to accommodate customer demands.
"I think the up and coming market is the Asian market," he says. "They have a really strong economy and they have got money to burn. They stay longer. The average in the industry is about 2.5 to three days — with the Asian market it is probably four or five."
The Walrus Bar and Hostel at London Bridge is already witnessing this trend, attracting a large number of customers from all over the world, including South Korea.
According to Alexander Vicens, hostel manager at the 68-bed venue, the pub element, even though it does not have a commercial kitchen, is a major attraction.
It charges £20 to £30 a night with a basic breakfast offer of toast, cereals and fruit, which is also a big selling point.
He says it is crucial to have the right staff on board who can work in both the bar and the accommodation business.
"The main thing is that staff should be involved in both businesses and be able to work behind the bar, and at the same time offer an experience to the guests," he says.
"Hospitality is quite demanding and if pubs are looking to move into hostels they need to be open 24 hours."
Ben from Beds & Bars agrees, saying running a hostel is not for everyone. "You have to have the right team in place. You want a mixture of long-termers and backpackers and the systems to run a hostel such as check-in and yield management," he says.
"Don't get into running a hostel if you don't like travelling. We are all travellers and we love it."