Holiday Parks have long-term prospects as revenue jumps 65 percent in five years

UK holiday parks looking at Premiumisation strategy to retain former Cruise Line clientele.

The revenue of the UK’s Top 25 holiday parks has increased by 65 percent from £1.6bn (2014/15) to £2.67bn (2019/20) validating major PE investment in a sector that has performed strongly during the pandemic, according to data supplied by New Street Consulting Group.

The long-term rise in staycations has been one of the major factors behind the investment of private equity firms in a sector that’s seen Blackstone acquire Bourne Leisure, KKR purchase Roompot, with Away Resorts now owned by UK-based private equity house Bregal Freshstream.

New Street Consulting Group says holiday parks have been a winner of the Covid-19 crisis, having attracted a new group of higher-spending consumers who have been unable to or opted against going on cruise holidays or travelling internationally. The low density of guests at holiday parks makes them particularly suitable for social distancing.

Holiday parks are keen to expand their market share by appealing to a broader customer demographic. They are also enhancing their propositions by investing in technology and digital offerings to provide more sophisticated ways of communicating and engaging with the customer.

New Street Consulting Group says parks are undergoing significant programmes of premiumisation in accommodation, food service and activities to ensure that clients gained in 2020 are retained when the market for cruises and other overseas holidays reopens.

Richard Lindsay, Director at New Street Consulting Group, said: “Despite its fair share of challenges and impacts on income, the UK staycation sector is booming, with the holiday park industry in particular being one of the strongest performing parts of the leisure sector during the Covid-19 crisis.”

“PE houses see holiday parks as a long-term growth prospect and not just a flash in the pan during the year of coronavirus.”

“The changing demographics of those who visit holidays parks is likely to increase the speed of change in the sector. The opportunity to improve the perception of parks for the long term through major capital investment programmes is now likely to accelerate as we head towards summer 2021.”