Differentiation could herald a welcome shift for park operators
Posted 18th October 2021
A short while ago I enjoyed and interesting conversation with a major park operator who runs multiple UK sites and who has a deep understanding of how the market operates. Our discussion was around where the profit lay in different types of holiday accommodation.
The ubiquitous static caravan costs circa £20k and once sited on its pitch generates cash from day one. It is a tried and tested formula, a safe bet. Invariably static pitches are seasonal with rental income limited to seven or eight months per annum. In addition, with frequent occupancy, they quickly become tired in appearance and are often sold on after 4-5 years use. The static has wide family appeal, spacious if predictable, but can be seen in today’s burgeoning market as perhaps a little old fashioned with many users matching this ageing demographic.
During recent years the introduction of low-cost pods, products closer to enhanced garden sheds, have attracted a younger profile. These units offer very few amenities other than a roof over one’s head and their rental income reflects the basic accommodation on offer. In addition, their life span is limited and requires maintenance.
Shepherd’s Huts have become common place, especially with smaller site operators. These units offer higher quality of accommodation for couples and have full amenities and range in price from £40-80k, with some of the larger models costing over £100k. These more expensive units are often a garden enhancement and employed as extra luxury additional accommodation for wealthy buyers, rather than holiday lets.
As consumers seek new experiences the emergence of more upmarket, engineered glamping pods, in the £40k plus price market, are beginning to find some traction from the larger park operators. In the past, these products have been overlooked as too expensive; however, as the Glamping market matures and Staycations become more popular, they can appeal to a new younger, more upmarket demographic who seek new experiences yet demand comfort and luxury.
To make products like these a viable financial proposition for traditional park operators they must:
- Have genuine ‘kerb appeal’- the wow factor!
- Be capable of generating up to £200 per night for either 2 or 4 berth configurations
- Offer top quality furnishings and amenities
- Be located on stand-alone sites or with a minimum of 15 metres separation
- If possible be available on a 12-month letting cycle
- Enjoy a low maintenance life of 15-20 years
Such products will not spell the end of the static, but it will provide an additional income stream to park operators who want to widen their demographic and offer true differentiation in their accommodation offering.