Holidays parks enjoy boom as weak pound after Brexit boosts staycations
The caravan, camping and holiday parks of the UK are enjoying the benefits of the pounds slump in value since the Brexit vote, with the biggest 100 holiday venues in the country seeing a total of £2.7 billion of spending by British holidaymakers last year.
That’s according to new research by the lending firm Ortus Secured Finance, who said the 9% increase in ‘staycation’ spending over the past five years was due to UK holiday parks offering value for money along with high-quality facilities like restaurants, bars, shops and swimming pools.
The 13% slump in sterling against the US dollar and 9% drop against the euro since last year’s EU referendum vote has also led to staycations being a more attractive proposition for UK holidaymakers, as the weak pound means foreign travel is increasingly expensive.
John Salisbury, managing director of Ortus, said of their study:
“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.”
The trend for staycations and the rise in spending has led to UK holiday parks becoming a target for private equity firms, with their robust growth and solid revenues making them a sound investment.
Such deals have included the sale of the UK’s largest caravan operator – Parkdean Resorts – for £1.35 billion last December. Park Leisure was bought by an investment consortium for £103 million last year, as was Park Holidays for £362 million.
While it may all seem like good news, holiday park operators have also been warned that they need to continue to invest in order to attract more selective domestic holidaymakers – which could prove to be challenging for what are essentially seasonal businesses. Salisbury said:
“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.
“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.”