UK holiday parks hope for staycation boom as pound slides
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Version 0 of 1. Britain’s biggest holiday parks are hoping the Brexit-hit pound will trigger a rise in staycations after a flat performance in 2016. Turnover edged higher at the 100 largest caravan, camping and holiday parks, from £2.66bn in 2015 to £2.67bn, according to research by Ortus Secured Finance. Sterling’s 13% slump against the US dollar and 9% drop against the euro since the EU referendum vote last June has also made holidaying at home more attractive, as the pound’s weakness bumps up the cost of foreign travel. John Salisbury, managing director of Ortus, a property lender, said: “Caravan, camping and holiday parks are going from strength to strength, combining value for money with high-standard facilities to maximise the guest experience. “The recession and the ensuing trend for staycations gave holiday parks, camping and caravan sites access to an even broader customer base. They have been building on this ever since.” Holiday park firms have become the subject of a flurry of private equity deals, with robust growth and solid revenues catching the eye of investors. Deals have included the £1.35bn sale of Parkdean Resorts, the UK’s largest caravan operator, to the Canadian private equity firm Onex Corporation in December. Park Leisure was snapped up for £103m by a consortium led by Midlothian Capital Partners, while Intermediate Capital Group bought Park Holidays for £362m last year. Ortus said facilities such as shops, restaurants, bars and swimming pools were key to keeping holiday parks and campsites attractive and increasing customer spending. But operators needed to continue investing to attract ever more selective holidaymakers, though this could be challenging for such seasonal businesses, especially among the smaller operators. These businesses often struggled to set cash aside for renovations and additional amenities due to peaks and troughs in cashflow, according to the Ortus report. “Like many other businesses in the tourism, leisure and hospitality industries, operators need to commit to continued capital investment in order to maintain competitiveness and stay ahead of the game,” Salisbury said. “As the market increasingly demands not only well-maintained everyday amenities but luxury add-ons like wood-fired showers, pools, games rooms and wifi, this opens up significant opportunities to generate more revenue and fuel growth. “Alternative sources of funding are playing a critical role here, enabling businesses to access the [capital] they need to deliver the high-quality facilities that many guests have come to expect.” |