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Parks, Sports & Marinas - The economics for continued strong trade

17 11 20 Parks Sports Marinas The Economics for Continued Strong Trade hero

As all who are involved in the sector know only too well, just as we were gearing up for the core trading season, the initial lockdown descended and Easter was cancelled. Of course, this had to coincide with one of the most fantastic spells of Easter sunshine we have seen in years!


The initial shock of lockdown was a massive source of concern from a trading perspective, particularly the uncertainty over when restrictions would be lifted and the frustration of a government giving more airtime to other sectors and unwilling or unable to see the obvious ability of parks to largely conduct business as usual with a form of accommodation that could not have been better designed to deal with social distancing.

Even with the various government support on offer (including latterly the introduction of Flexible Furlough – strongly lobbied for by the industry - and the extension of the cut in VAT to 5% for the hospitability and tourism sector until 31 March), with no bookings coming in and no platform from which to sell holiday homes it was a worrying time for all.

Just six months on however, we were delighted to see and hear that many of our agency and valuation clients had regained significant ground since being allowed to reopen their doors; some are even anticipating exceeding original 2020 budgets.

Whilst it feels like the latest nationwide lockdown will come into force just as the industry would have been gearing up for an end of 2020 push, uncertainty is of course ever present, with local lockdowns and tiered restrictions likely to be possible for some time to come, there is certainly reason to be optimistic. Let’s not forget that the ‘staycation’ has benefitted the UK parks market for several years but the popularity has been emphatically reinforced during the pandemic so far. We humans are natural explorers and social creatures and will continue to value our holidays highly, especially with the daily pressures of living in a pandemic.

With “social distancing” being the headline phrase for 2020 onwards, holidaymakers are being drawn to parks over other accommodation types as they are by their very nature are more “distanced” than other forms of holiday accommodation and offer the safe haven to match the consumer need to switch off and “escape”.

Overseas travel has become increasingly problematic, from the risks associated with communal travel to the prospect of finding yourself in quarantine upon your return to the UK, with the associated impact on income and job security. Much safer to stay at home and explore everything that the UK has to offer.

Holiday home sales have perhaps been the biggest surprise, with operators reporting some seriously impressive sales figures in Q3. The ‘grey’ pound is one key driver of this with that demographic generally having relatively low outgoings, higher levels of savings and, larger discretionary spend and are now opting to spend their holiday budgets on a ‘bolt-hole’ on home soil, often in pleasant rural locations, to escape urban areas.

With sustained demand it is perhaps supply that could provide the imbalance as we move towards next season, with manufacturers having to shift from a period of forced closure and operating with a reduced capacity to working towards full capacity and making up ground in a very short period.

There are certain to be bumps in the road ahead; whether it be the latest lockdown, the threat of further local or national lockdowns, the end of the government job retention scheme (and the effect this will have on household incomes) or issues with caravan and lodge supply. However, as it did during the Great Recession, we are certain that the holiday parks sector will prove robust and will remain a fantastic space in which to trade and invest.

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About the Author

Amy Brooksbank is an Associate Director in our Parks, Sports & Marinas team at Colliers International.

Her primary focus is the holiday and home parks sector where she provides valuation and agency advice to a range of clients including banks and operators. Her expertise also extends to the wider licensed and leisure sectors where she has advised upon a wide range of assets, from pubs to visitor attractions.

For more information, please email amy.brooksbank@colliers.com.


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Amy Brooksbank

Associate Director

Parks Sports and Marinas

Bristol

Amy works within the Alternative Markets Division at Colliers International. Her primary focus is the holiday and home parks sector where she provides valuation and agency advice to a range of clients including banks and operators.  Her expertise extends to the wider licensed and leisure sectors where she has advised upon a wide range of assets, from pubs to visitor attractions.

Amy previously worked alongside LPA Receivers within Colliers' Corporate Restructuring team, managing and overseeing the disposal of distressed commercial property and land in South West England and South Wales.

Amy joined Colliers from a Local Authority where she had been dealing with a wide range of property issues. She was part of a successful Agency and Development team, who raised in excess of £9 million of capital receipts in three years from surplus operational property and provided land and property advice to a range of internal departments; working on CPOs, asset protection issues, leasing and acquisition projects.

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