Clearthought Signals Growth and Mergers for Holiday Parks

The latest issue of Clearthought is now available, looking at activity in the camping, caravans and holiday parks market with specific focus on market drivers and key trends in Europe. The main findings are as follows:

Holidaymakers increasing attention to comfort and quality are driving significant growth in the outdoor accommodation industry, according to Clearwater International.

In its latest report, Clearthought finds that the European camping, caravans and holiday parks market has been transformed over the past decade as rising demand has led to significant investment in facilities across the continent.

There are a number of trends in the market which are driving growth:

Brand development – operators want to both improve the quality of the holiday experience and increase direct sales in order to enhance margins and reduce reliance on third-party booking agents

Premiumisation – operators are improving the quality of the accommodation and experience.  For example in the UK many parks are increasing the availability of lodges compared to caravans

Environmental – holidaymakers are seeking vacations which are nature-friendly and offer a sense of freedom for families

Frequency – consumers are seeking more regular holidays or short breaks.  Owning a holiday home or taking more regular holidays is driving demand

Value for money – consumers want comfort and quality at reasonable prices and mobile homes and lodges can provide this. For those seeking a holiday home for more frequent holidays, a mobile home or lodge can offer significantly better value than purchasing a property

Range of services – sites are increasingly providing a full range of leisure and social activities with demand particularly strong for high-quality swimming pools, water parks and sports facilities. With these facilities on site, and some included in the cost of the stay, holiday parks are attractive destinations

Regulation – while this varies between countries, regulation regarding mobile home installation remains quite flexible across Europe, driving further growth in the market

Activity in the UK market

Underpinned by a strong culture to buy second homes, improved access to credit, and continued consumer confidence, the UK outdoor accommodation market has performed particularly well over recent years. On top of this, the ‘staycation’ trend has been a particularly influential factor in driving the market’s growth over the past decade.

For instance, the number2 of trips taken domestically by UK residents soared from 50.4 million in 2008 to 57 million in 2013. This was initially in response to the economic downturn, but has since been driven by trends such as the desire to take more frequent and shorter breaks, and heightened security concerns over taking holidays abroad. Wealthier families are also increasingly attracted to the camping market with luxury yurts and safari tents becoming popular options.

Total consumer spending on outdoor accommodation holidays is estimated at £2.2bn3 and grew 4% in 2015. In total, UK residents took 102.7 million overnight trips in England in 2015, totalling 300 million nights away from home, with an expenditure of £19.6bn3. The number of domestic trips was 11% higher in 2015 than in 2014.

Last year’s Brexit vote could further consolidate these trends, particularly if sterling remains week thereby making foreign holidays more expensive. A survey4 of over 500 UK tourism businesses found that 21% of domestic tourism businesses have experienced an increase in forward bookings since Brexit.

M&A activity:

Major operators, backed by strong financial resources, are consolidating the market as they seek to control supply and distribution. This means independent operators, which have limited resources to make the investments needed to both update their sites and meet regulatory standards, are in a position of relative weakness as they compete with leading private groups.

For a more in-depth analysis of the market with insights to the rest of Europe; trade and private equity transactions; and multiples paid, please refer to the full publication  here Camping Caravans Holiday Parks Clearthought