Commercial business at UK universities is thriving
23/11/2017

Taking a more commercial approach is enabling universities to compete with local businesses, grow outside income and offer a better service to students and staff on campus.  Both the creation of new facilities and the turnaround of under-performing services are generating income and improving provision for users. 

There is nothing new about universities using lecture theatres and student bedrooms to generate income from conferences.  But over recent years this is being taken to another level, with new conference centres, year-round hotel standard accommodation and collaborative bidding to bring in larger contacts. 

At Loughborough University, imago and Campus Living form one of the most successful conference and hospitality groups in the university sector. With its comprehensive portfolio of conference centres, hotel and retail outlets, the group has become a key player in the UK conference market. Burleigh Court, the flagship year-round venue, attracts blue chip corporates, international academic conferences and high-profile sporting events. In 2012 they hosted Team GB for the London Olympics and they have won numerous awards including Investors in People and VisitEngland. 

In 2013 the University of Leicester transformed its 1960s grade II listed hall of residence in a £17 million project to become one of Leicester’s premier city centre conference destinations.  College Court has seen steady income growth, with £500,000 added to the top line last year.  Building the brand and customer loyalty has been key to developing a balanced client base with 80% of business from corporates/public and 20% from internal university business. The hotel has won several awards including “Building of the Year” and “Hotel of the Year.”

Edinburgh First, the University of Edinburgh’s conference, events and accommodation wing, has 200 beds at its year-round hotel and serviced apartment properties. Using over 5,000 student rooms each summer vacation, it becomes the largest hotel in Scotland for three months of the year. Edinburgh First also capitalises on city wide events, engaging with over 10 major festivals each year. Last August over 1.3m Fringe and International Festival tickets were sold for over 60 university venues. Edinburgh First has consistently grown income and profit, generating over £16m revenue last year.

Queen’s Belfast University extended wedding business across its estate and saw a 39% increase in the number of bookings. Their Riddel Hall venue was awarded Belfast Wedding Venue of the Year at the Northern Ireland Wedding Awards in January 2017.  The University of Sheffield turned a beautiful but outdated hall of residence into a successful boutique hotel, rated 8.8 on booking.com the hotel hosts weddings, conferences and weekend breaks.

Southampton Solent recently opened a state-of-the-art Conference Centre as part of its new £33 million Spark building. An imaginative marketing campaign led to the spaces being sold out for the first three months of operation, even before the building opened.

Universities are also joining forces to compete for bigger business in the conference market. Leeds Beckett University, The University of Leeds and the first direct Arena joined forces to produce a coordinated City of Leeds bid to host the prestigious Teach First Summer Institute in July 2017 and 2018. Joining forces enabled them to fight off strong competition from the sector and win the bid, worth £3 million over the next two years - none of the individual stakeholders could meet the client requirements alone. The city of Leeds also benefits from a delegate spend of over £500,000 in the local economy each year.

But it is not all about high value contracts. Many institutions have seen the value of opening up other campus services such as sport facilities, design and printing services and nursery provision to make the most of their assets, bring in income from outside sources and fund improvements.

The University of Leeds Print and Copy Bureau recently invested in an online ordering platform to compete with high street print shops close to the university. As a result business going through this channel has increased by 20%. Leeds is also making the most of its sport facilities. In 2016 they generated £150 of income from a comprehensive weekend swimming lesson programme for children and over £90k from new personal training and fitness courses. 

The University of Essex and University of Edinburgh have used their commercial acumen to turn under-performing nursery facilities into high quality profitable services benefiting student, staff and the local community. 

Five years ago, the University of Essex day nursery was operated by a third party at a small cost to the university - a story familiar to many university nurseries. Once it became part of the University of Essex Commercial Services things began to turn around. With a new business model, Essex has managed to increase occupancy and income year on year. While places are reserved for the children of students, 30% of places are now taken by the public. Public fees are higher but competitively priced against other childcare providers in the area. The nursery has recently undergone a 100k development of the outside space adding to its already large outside space and beautiful setting of the Wivenhoe Park Campus. A steady growth in surplus of around 6-7% is returned to the university, and the students, staff and local community benefit from a high-quality service. 

For many years the University of Edinburgh operated two children’s nurseries. The facilities worked well, but increasingly lacked flexibility and opportunities for children, in an environment that made day to day running difficult and costly. 

When a site became available the opportunity was taken to build a new nursery that was innovative in design, sustainable and offered substantially increased opportunities for the children. The new Arcadia nursery opened in August 2014 with three age group playrooms: Harmony, Peace and Serenity. Use by university parents has increased by 40% and demand greatly exceeds the 113 places available. Keen to repeat the success and expand, a second Arcadia Nursery is now in development at the Easter Bush site.  It will house 76 children and opens in summer 2018.

Many institutions are now sharpening their commercial skills to make the most of their large estates and facilities. CUBO is seeing increasingly astute commercial projects and sophisticated marketing campaigns coming together to enable university services to rival high street and local businesses.  It’s a win/win situation, offering improved services and facilities to students, staff and the local community, while returning income to the university.  

CUBO is the professional association for senior commercial staff in the HE sector. Benefits include professional development, networking and sharing best practice. Find out more at www.cubo.org.uk