In the UK, a holiday park is a campsite facility with a range of accommodation styles, and a popular option for hospitality investment. Holiday park developer Coppergreen recently paid £25 million for two sites in the UK along with permits for expansion.
The deal was the latest in a series in recent months, as the sector looks to take advantage of the growing trend for staycations in the UK, bolstered by the weak pound and hot summer weather.
Coppergreen acquired the Kenwick Park Golf Hotel and Spa and Lodge Park in Lincolnshire as well as Clumber Park in Nottinghamshire, doubling the size of its portfolio. Backer BGF invested a further £10 million of growth capital while HSBC has provided £15.3 million toward these purchases and general group capital expenditure.
“Kenwick Park and Clumber Park are absolutely perfect sites for our portfolio,” said Coppergreen CEO David Copley. “The British holiday market, and those choosing to have [a] staycation, is growing and this will enable us to improve our offering.”
The deal followed similar transactions from Coppergreen rivals Verdant Leisure and Lakeland Leisure. The latter acquired Roydon Marina Village, an inland marina and leisure site located near the northern outskirts of London, marking its foray into the southeast of England. The deal came shortly after agreeing to new financing with HSBC.
In February, Verdant Leisure acquired Scoutscroft Leisure Park in the Scottish Borders, the fourth park to be acquired since the company was backed by Palatine Private Equity in April 2016.
“Verdant Leisure’s consistent growth over the last two years has been impressive and demonstrates how the buy-and-build strategy is having a significant impact on the company’s sales,” said Palatine Private Equity partner Ed Fazakerley. “With eight parks in total, Verdant Leisure has established itself as one of the leading staycation park operators in the UK, and we look forward to seeing it develop even further as we continue to fulfill the firm’s acquisition strategy.”
The Effect on UK Hotels
While the park operators enjoy the benefits of a weak pound deterring overseas travel, the impact has been felt by the tour operators and compounded by the current heatwave in Europe. Last week saw Thomas Cook Group report seeing customers across its European markets “delaying decisions about their summer holidays as they enjoy the record temperatures at home.”
At the beginning of the summer Travelodge estimated a quarter of Britons were taking more UK short breaks this year, with 85 percent taking on average three staycation breaks throughout 2018. The budget brand estimated that, collectively, Brits would boost the UK economy by £31 billion by holidaying on British shores this summer. The brand, which is based predominantly in the UK, was looking to take advantage of the trend, as was budget rival Premier Inn, which announced in May that more than 1,000 new Premier Inn rooms were coming to coastal locations across the UK.
“With the recent rise in staycations, we’ve found there’s an increased demand for Premier Inn bedrooms in coastal locations around the UK,” said Jo Moon, director of acquisitions at Whitbread. “There are also significant regeneration and modernization projects taking place in seaside towns and cities across the UK, and we’re excited to be a part of this change. We plan to build on this momentum over the next 12 months and are on the lookout for more coastal sites for new Premier Inn hotels.”
With the imminent exit from the EU depressing the pound, staycations could see an additional driver as the airline industry is warning of the perils of a hard Brexit, which could see flights grounded in March 2019 if no deal is reached with the bloc. This is seen as unlikely, but the potential may be enough to make customers considering a spring break look closer to home. Enter the holiday parks.
Katherine Doggrell is an editor at Hotel Analyst, the U.K.-based news analysis service for hotel investors.