Greenwich means business
Restaurant and pub operators around the UK who are uncertain about opening on Millennium Eve may look enviously towards Greenwich, intensively hyped as the place to be on the night. But, even here, there are questions about what will happen.
Operators in the London borough are definitely planning to open on New Year's Eve. Even without advance bookings, the thousands of revellers expected to flock to the borough for the big event should make it a profitable night. But there is talk of areas being cordoned off as part of a crowd-control effort, and this could cause problems for local traders. So far, police and the local council have yet to confirm details.
This is causing mild irritation for many of the newcomers to the area who are hoping to cash in on the extra business. The past year has seen a rash of new openings from a mix of independents and large operators. For many, the historic borough's prominence in the millennium celebrations has been a factor in their decision to choose Greenwich. But several developments in and around the area have created high expectations of strong prospects continuing long after the millennium hangover has faded.
The allure of the millennium played a part in Shaun Wilson's decision last year to open his own restaurant, North Pole, with business partner Robbie O'Neill, but he claims that he is not overly bothered about the big night itself. "Theoretically," he says, "it is the centre of the world for Millennium Eve, but if they do decide to close off the centre, Greenwich may not be the place to be on the night."
More importantly, it was the distinct lack of trendy restaurants in the area that provided the reason for the pair to invest in what Wilson describes as a formerly "grotty old public house" and turn it into a 60-seat restaurant with average weekday spend per head of £30. "We agreed that there was not much happening in Greenwich," Wilson says. "It was full of pubs and no really decent restaurants."
The same rationale was used by brothers Pascal and Stephen Dowers when they opened their first venture, Time restaurant and bar. They chose a former music hall in the centre of Greenwich, which now has a funky interior including a mezzanine floor overlooking the bar. There is a pianist at lunchtime and blues bands at the weekends. The intimate 36-seat restaurant also averages £30 spend per person.
The Dowerses decided to concentrate on local custom rather than the thousands of tourists expected to converge on the area for the Millennium Dome attraction. Customers at the restaurant and bar, says general manager Roger Beeley, tend to be locals rather than tourists. "Greenwich is a popular place anyway, and it has always been as busy as any other part of London," he says. "We just have the added bonus of the New Year."
Despite the new openings, there is still the old Greenwich, which has seen little change since the 1950s. Its mainstay among eateries and bars are traditional pubs with lunchtime jazz, and cafés with grubby net curtains selling pie and mash - an indicator of the lingering demand for cheaper food alternatives.
With existing operators and pubs already offering good-value meals, new operators have found that they are forced to keep prices down. "We wanted to keep prices low and keep it simple as there are lots of places to eat in Greenwich," says Simon Robson, general manager of the Observatory bar. "The split is 75% wet and 25% food but we want to build food up to 40%." Since opening in July, Robson has found that light meals such as warm chicken salad or crab cakes are hitting a spot not catered for in the more traditional boozers.
Food is competitively priced at another newcomer to Greenwich, Interpub, which opened its third St Christopher's Inn earlier this year. The offerings are simple, such as burgers and traditional fish and chips, with an average spend of £4.50 per head. Food accounts for only 20% of sales at the moment and coffee a further 10%. But operations director Murray Roberts is hoping to increase this significantly.
The pub, which is aimed at the backpacker community, also has a coffee shop and accommodation above, comprising two twin and seven six-bed dormitories, charging £13 per person per night. Roberts resisted a site close to the Dome, which is about two miles from the centre of Greenwich. "We didn't go for that, because the Dome is the only thing out there," he says. "There's no heritage or history, as there is in Greenwich centre. If they turn it into a football stadium [once it is no longer a tourist attraction], it will only be busy while there are events on."
Another pub, from the Bass student pub brand It's A Scream, is indicative of a wider expectation among operators of an influx of business from Greenwich's new university, which opened in September. Previously located in Woolwich, the university has taken over the former Dreadnought Seamen's Hospital plus part of the Royal Naval College, bringing 2,500 students to the area. An additional 700 students will join them next year when the university is running at full capacity.
The university is a safeguard for business over the next decade, operators believe. Combine this with the opening next month of the Docklands Light Railway (DLR), which will provide a gateway to the nearby commercial district of Canary Wharf, and operators have reason to be bullish.
Indeed, on the back of the DLR opening, North Pole, which currently opens in the evenings only, expects a major new revenue stream. "There are thousands of people working at Canary Wharf," says Wilson. "It will be just eight minutes away on the train, so when that opens we will open at lunchtimes."
Hotel companies are also beginning to expand their interests in the area. French group Accor, which already has the 82-bedroom Hotel Ibis in the centre of Greenwich, has lodged an application for an extension to give it a further 60 bedrooms. The group appears so sure of high occupancies that it has also applied to build a second 140-bedroom Novotel hotel.
Ruiz Henri, general manager of Hotel Ibis, says that occupancy this year has averaged 93% and he expects a similar level next year. "It will be very difficult to increase occupancy because it has been so busy," he says. "It is only Sundays that we find very quiet."
Planning permission is also being sought for another hotel on Lovell's Wharf, an area of regeneration between Greenwich and Woolwich. Under consideration is an application from Premier Hotels for a 268-bedroom hotel plus 139 holiday apartments.
Property company Stannifer Hotels, which owns 10 Holiday Inn Express hotels, fought stiff competition for the only site allocated for accommodation next to the Dome. The 162-bedroom Holiday Inn Express, due for completion next month, represents a £9m investment. But the company is expecting strong occupancy long after the Dome has ceased to be a tourist attraction, although it is not yet known what it will be used for.
"It is difficult to believe they would invest huge amounts of money and only use it for a year," says Stannifer's operations and assets director Paul Bell. Even so, the first year of opening is likely to be its best, with percentage occupancy expected to be in the high 80s next year before dropping to around 70% in year two.
Other hotel operators have decided to hedge their bets on the outskirts of Greenwich. Whitbread's Travel Inn backed out of the bidding for the Dome site when the prices got too high and also decided against central Greenwich. "We did a lot of research in Greenwich and hotels have not done as well at weekends as expected," says Travel Inn's managing director Grant Hearn.
The group is building a 74-bedroom hotel in nearby Woolwich, which it hopes will benefit from a mix of customers from Greenwich and corporate business from the City.
Invariably, the rush of interest has led to considerable increases in property values, with a knock-on effect on rents. This has led to some attractive offers flying around for long-established restaurants and pubs in the area. According to Andrew Thomson, partner in surveying firm Hunters, many are digging in their heels and resisting the temptation to make a fast buck from the big names eager to get their hands on prime properties.
"People are refusing to sell," he says. "For the moment they seem to be holding out to see how good business is going to get for them."
The other side of the coin, adds Thomson, is that prices may increase further. "I know a couple of private people who have received various offers from the big operators and are keen to hold out for more money," he says. "There may well be pressure on more people to sell when these operators find they have to increase their offers."
Sitting tight seems to be the preferred option for the majority, if only to take advantage of the immediate post-millennium business. But regeneration projects in the area will provide ample opportunities far beyond 2000, making Greenwich arguably one of the fastest developing areas of London.
Next week: Birmingham
Facts
North Pole
131 Greenwich High Road Tel: 020 8853 3020
Owners: Shaun Wilson and Robbie O'Neill
Seats: 60
The Observatory
56 Royal Hill Tel: 020 8692 6258
Owner: Endforth
Seats: 40
Time
7a College Approach Tel: 020 8305 9767
Owners: Pascal and Stephen Dowers
Seats: 36
St Christopher's Inn
189 Greenwich High Road Tel: 020 8858 3591
Owners: Interpub (01753 647603)
Seats: 120
Accommodation: 50 beds
Holiday Inn Express
Bugsby Way, London SE10 Tel: 01789 415565
Owner: Stannifer Hotels
Bedrooms: 162
Hotel Ibis
30 Stockwell Street Tel: 020 8305 1177
Owner: Accor
Bedrooms: 82
Tourism
The number of visitors to Greenwich next year is expected to double to six million, thanks to the Dome. Thereafter, it is predicted that numbers will reach a plateau, but will still be significantly higher than in pre-millennium days. Dome visitors will be encouraged to visit the centre of Greenwich via a cycle path or walkway along the Thames, a guided bus journey or by boat.
Greenwich visitor numbers
1998-99: 3 million 2000-01: 6 million 2001-02: 4 million
*Source: Greenwich Council
*Coming Developments
Millennium Village
Half-a-mile from the Dome is an area of 35 acres set to become a residential and commercial development, with wide scope for restaurants, pubs and cafés. This long-term project is expected to be completed by 2005. (Development consortium: Greenwich Millennium Village, 020 7813 3050)
Greenwich Pier
Legal wrangles have delayed this project but Greenwich Council now expects it to begin late next year. A new building is to house a family restaurant and a café. (Developer: Centros Miller, 020 7499 3917.)
Cutty Sark for Maritime Greenwich station
Above the new Docklands Light Railway station will be the combination of a refurbishment of an existing listed property and a new building for a retail complex encompassing restaurants and cafés. Work starts early next year and is scheduled for completion by the end of 2001. (Developer: Centros Miller.)
Greenwich Reach 2000
A stretch of waterfront on the east side of Greenwich centre is to be the home of London's only central cruise-liner terminal, which is expected to pull in about 65 ships per year, each with the capacity for as many as 1,500 passengers. The surrounding development will include 140 luxury flats, a multiplex cinema, a 120-bedroom hotel, theme pubs and restaurants. Work starts early next year, for completion by 2003. (Developer: Clearwater Estates, 020 7629 2445.)
