LONDON (Reuters) - British pubs and brewing company Marston’s (MARS.L) plans to open a chain of hotels alongside its growing pub-restaurant sites.
Marston’s, which runs Pitcher and Piano pubs and brews ales such as Pedigree and Hobgoblin, said as many as five of its 25 to 30 annual new pub openings could include a Marston’s lodge.
“The market for accommodation with pubs seems very strong,” Marston’s Chief Executive Ralph Findlay told Reuters. “It’s not going to be a huge (part of group) but it will be meaningful.”
The company already has some 800 rooms within its 1,800-strong pub estate. It says a string of self-managed lodges could boost sales at adjacent new pub-restaurants by 3,000-4,000 pounds ($6,600) a week in addition to its own business.
It previously struck similar deals with British hotel operator Travelodge but decided to explore building its own offering when Travelodge’s business hit difficulties.
Marston’s has four lodges running and a total of up to 15 sites slated over three years. Findlay said the firm also has excess land on existing pub sites where lodges could be built. Its efforts would be focused outside of London.
Hotel prices will be similar to budget chain Premier Inn (WTB.L), Britain’s biggest hotel operator, which also runs hotels alongside its pub restaurants, Findlay said in an interview at one of Marston’s London establishments.
The experiment is part of a wider repositioning at Marston’s, which is focusing all of its new pub openings on managed, food-led, family-orientated outlets, selling off a number of drink-led tenanted sites and converting others to a more successful franchise model.
Like many of its rivals, Marston’s food focus is borne out of UK consumers’ growing penchant for eating out at places with value offers rather than at more expensive restaurants.
Those key managed pub-restaurants, which generate over four times as much as profit as its taverns arm, will grow from around 360 sites now to 430 by 2016, with disposals elsewhere seeing the group’s estate fall to 1,550 pubs.
Shares in Marston’s, whose origins dates back to 1890, are down 4.7 percent from a year ago at 149 pence, valuing the business at 850 million pounds.
Editing by Tom Pfeiffer