News & insight

Staycations here to stay despite second lockdown

Adam Burkinshaw / 2 Nov, 20

The recent Government announcement of Lockdown 2 is set to close holiday parks for the second time in a year. Prior to the announcement Sanderson Weatherall had already noted the exceptional work of park owners and operators across the industry who have already stepped up the challenge and done a superb job reopening parks and businesses in what has been a very challenging period for all. The second closure may be less critical as it avoids the peak summer season, and some parks will have already closed, however, if the lockdown is extended further it may impact on the lucrative festive trade.

After the first reopening in July 2020 the hard work has paid dividends with the majority of operators reporting extremely robust and brisk trade with strong occupancy and bookings across all accommodation types from tents, tourers and glamping units to statics and exclusive lodges. Undoubtedly this has in part been driven by a huge pent up demand from holidaymakers finally being able to take a holiday after enduring a lengthy lockdown, though we consider it is also reflective of the fact that our holiday and caravan parks offers a very attractive option for ‘open air’ holiday in spacious and beautiful surroundings, a pre-requisite for a safe holiday environment. We are aware there have been issues to mitigate with many parks unable to offer the full range of services and amenities that would ordinarily be provided including the restricted operation of bars, entertainment and leisure facilities, although it is clear that this does not appear to have dampened demand.

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”

Adam Burkinshaw - Caravan & Holiday Parks Specialist

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.

Topics: Blog

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