Over the past 18 months there has been increased interest from investors in the UK holiday park sector, in particular, from US private equity groups. This has led to record valuations and purchase prices. But, will these private equity firms see a return on their investment?
Increasing revenue by adding pitches to existing parks or the development of new parks is a key attraction for investors. However, the grant of planning permission and the requisite site licence is only one hurdle to overcome.
As with many other sectors across the economy, the holiday park sector is experiencing supply chain challenges. If you order a new caravan or lodge for your pitch now you are unlikely to receive it until 2024. This could delay the increase in revenue from pitch fees and caravan sales.
There is also the age-old problem of the British weather and the continued attraction of the staycation
Whilst the UK holiday park sector was all but shut down during the first lockdown, most park operators were able to clawback lost revenue in Q3 and Q4 once restrictions were lifted as many sought to get away from the same four walls and enjoy the warm weather.
The staycation remained popular throughout 2021. However, with the relaxation in Covid restrictions and the requirement for a negative PCR Test when travelling abroad, many people may start to look for foreign holiday destinations again and a guaranteed week or two in the sunshine.
But for customers, it is not just the staycation that is making the acquisition of a lodge attractive. For many people like myself, lockdown has taught us that we can work anywhere so long as we have our laptop and a decent enough internet connection. So we can ‘work from home’ or take a week out and work from a beautifully equipped lodge in the Norfolk Broads. Sounds lovely!
There is also the attraction of not being lumbered with a large Stamp Duty Land Tax bill, which for a holiday home comprising bricks and mortar would include a 3% surcharge.
No wonder many in the UK holiday park sector remain optimistic they will see a return on their investments.
Disclaimer
This information is for general information purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. Please contact us for specific advice on your circumstances. © Shoosmiths LLP 2025.