Owners of holiday parks in the South West will need to concentrate on quality and diversify where they can in order to survive in an increasingly tough environment. That’s according to experts at Colliers International who report the triple whammy of VAT on caravan sales, high fuel costs and poor summer weather is hamstringing recovery in the domestic holiday parks sector.
Parks specialist Ben Jones said the majority of owners were predicting the challenging market conditions they had endured over the last two years looked set to continue through 2013.
He said: “Although most operators predict more of the same this summer there was also a worrying increase in the number of operators who felt the market had deteriorated over the past 12 months.”
Ben Jones was commenting following publication of the third annual Colliers International Caravan Park Sector Overview – the most comprehensive guide available on the state of the UK holiday park sector.
The overview, which takes in the major accommodation types within the sector including touring and camping parks, holiday home parks, self-catering operations and residential caravan parks, confirmed 2012 was another mixed year.
He said: “The guide gives a unique opportunity to gauge the views of owners across the industry and helps us advise and inform operators and potential owners on how, where and when to proceed.
“Although the overview makes it clear trading conditions have remained difficult they are certainly not impossible and some of our clients are bucking the trend and trading exceptionally well.”
He said strength of management and investment continued to be key to success.
“Although the overall number of people taking domestic holidays may contract there is still opportunity to earn market share from your competitors, which, by its very nature, requires a pro-active approach.”
Ben Jones said today’s social media platforms could be a double-edged sword for owners.
“Pro-active marketing, good use of social media, maintaining customer records and direct marketing is essential but on the other hand website reviews can be damaging.
“For touring and camping parks it is essential to make sure basics such as the toilet facilities are as good as they can be and kept clean at all times – owners could see business literally going down the drain through damaging posts.”
Ben Jones said the parks sector faced three main challenges which were outside the control of the typical operator.
“The government’s decision to apply VAT to caravan sales from April this year has been a major blow to an industry already facing punishing high fuel costs not to mention wet and windy summer weather.
“Rising operating costs, coupled with fixed or reducing revenue, have eroded profits for many operators during the last few years.”
The British climate remained the biggest threat to the sector with trading stifled in 2012 by an exceptionally poor summer. However, knowing your local area and what draws customers can help counteract the negatives. Surfing is one of many virtually year round attractions which continue to pull in the crowds across Wales and the West.
“There’s not much we can do about the weather other than to underline the fact the moment the sun came out on the last Bank Holiday the crowds came streaming back - proving the parks and leisure industry here has a healthy future if owners can react to the changing market conditions.”
Welsh tourism grew by more than 10% a year between 2002 and 2011.
The same league table had Cornwall at the bottom, with tourism shrinking 5% a year on average during the same period.
Devon was near the bottom and saw tourism shrink by 2% a year on average.