Staycations here to stay despite second lockdown

As reported in our earlier summer update we had already witnessed a robust return of caravan sales following the opening of show grounds in June and it is pleasing to report this has continued, enabling many operators to make up, and in some cases exceed, lost ground on sales forecasts following the enforced period of closure.

As we write indicators for 2021 still look very positive for these trends to continue with many parks having a head start on letting bookings with a substantial pipeline of holidays already transferred / delayed from 2020. Airlines and tour operators continue to forecasting a slow return to pre-covid levels and the second lockdown will further hinder this, a positive and real opportunity for further growth in the UK holiday market.

Sanderson Weatherall have continued to see the demand for parks significantly outstrip their supply with existing and established well funded operators seeking opportunities for expansion in the sector. Compounding the demand we are also seeing a number of new entrants and private equity/investor backed operators seeking to gain a foot hold.

Sale volumes of parks are undoubtedly lower than in previous years although Sanderson Weatherall have continued to transact sales of holiday and residential parks during and post lockdown across all types of park. This has included sales of properties to new entrants in the market from as little as £500,000 to individual parks achieving well in excess of £10M.

There is an increasing demand from operators looking to sell wanting to ensure discretion. We have successfully agreed sales on a number of parks that have been offered on a discreet and confidential basis, where the lack of supply, exclusivity of opportunity and carefully targeted approach that we have managed has led to competitive interest between the most active and acquisitive purchasers in the market resulting in a very lucrative outcome for our clients.

Looking to the future and noting some caution, it cannot be ignored that the global pandemic has already and will continue to have a significant impact on the UK and wider global economy. As we write this local and regional lockdowns have been followed by the recent news of a nationwide lockdown. With numerous job cuts to date and unemployment on the rise it is clear that we face continued uncertainty for some time to come. Whilst the caravan and holiday park sector provides a very attractive and robust business model in these uncertain times, potential head winds cannot be ignored; increased unemployment and a reduction in disposable income could impact parks in the future. We believe a flexible and adaptable approach to traditional business models will be the order of the day.

We are already seeing evidence of banks tightening their lending criteria, and in some cases their overall appetite to lend. Outside of the private equity market the sector has traditionally been funded, very successfully, by the main high street banks, though as lending criteria change we see real opportunity for challenger banks and alternative funders to compete for a share of the market which will be buoyed by the traditional resilience the sector offers in uncertain times. There are undoubtedly exciting, though challenging times ahead.

Get in touch

Since Lockdown1 Sanderson Weatherall have successfully acted for clients across a range of caravan parks. Since March 2020 we have agreed sales in excess of £60M which have successfully transacted or are in solicitors hands, with a large proportion of these being confidential sales. If you wish to speak to us regarding the potential disposal of your park business, we would be delighted to speak with you in strictest confidence.