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Market snapshot: Holiday camps

The market


There are some 3,000 holiday camps in the UK, according to the British Holiday and Home Parks Association (BH&HPA), which in 2004 generated some £173.5m in tourist revenue, according to VisitBritain.


The definition of a holiday camp ranges from individual and often family-run touring parks and camp sites to which you would typically  take your own accommodation such as a tent or caravan, to full scale resorts with infrastructure such as housekeeping and food and beverage. Some 80% of the market is dominated by the smaller players, leaving around 600 larger holiday parks or resorts.  



Key players


The biggest single player is Bourne Leisure, which in 2001 bought the UK holidays division of Rank Group for £700m, giving it control of Haven Holidays, British Holidays and Butlins.


Haven and British Holidays have 35 holiday camps between them. Butlins, from a heyday of 100 camps in the 1960s, now has “resorts” in Minehead, Skegness and Bognor Regis.


The other major player is the now publicly-listed Center Parcs, which operates four short-break holiday villages in Nottinghamshire, Wiltshire, Suffolk and Cumbria as well as sites in Europe.


Pontins, once owned by Butlins but now part of the empire of entrepreneur Trevor Hemmings, has eight sites around the UK.


Growth prospects


The sector’s Hi-di-Hi image has been a notoriously tough one to shake off.


The rise of the cheap package holiday from the 1960s onwards sounded the death knell for the glory days of the holiday camp market and life has been tough ever since.


The arrival of Center Parcs in Sherwood Forest in 1987 transformed the sector, creating a more upmarket and aspirational image.


Center Parcs has reported rising occupancy figures, to 92.4%, and is planning to open a fifth site in Bedfordshire. At its half-year results in December 2004 it reported pre-tax profits of £20.1m, slightly up on the £19.5m posted at the same point the year before.
 
The foot-and-mouth outbreak devastated the holiday camp sector, just as it did so much of the hospitality sector, says Jon Boston of BH&HPA.


“It closed the countryside for the best part of a year, and particularly hit touring parks,” he says.


But since then trade has bounced back. The sector was less badly affected by the fall-out from 9/11 and the Iraq war than many, and may even have benefited.


“There was a time when people looked at UK holidays as being a safer option,” argues Boston.


In 2002, trips to holiday parks, camping and caravan holidays rose to a record level of 17.3 million, the equivalent of one in five UK holiday bednights.


Key trends


Alongside the shift upmarket, holiday camps over the past few years have spent much more time and effort on niche marketing, promoting themselves to specific sections of the population, family holidays, adult-only holidays, activity breaks and so on.


The growth of budget airlines has been another recent challenge but, argues BH&HPA’s Boston, has not had the completely negative effect that might have been expected.


“Budget airlines have caused holiday patterns to change. There is a trend now towards more short-term breaks rather than one long break in the summer. So people may take a few days in, say, Nice but they may also then want to spend time in a holiday park with the whole family in the summer,” he says.


Research from Mintel has suggested that such short-breaks now account for more than half of all holiday visits in the UK, and that the market for these is increasing steadily. Alongside this, the UK tourist has become increasingly demanding and quality driven, suggests Boston.


“People are much more discerning about what they want from their main holiday,” he adds. “If there is a pool, for instance, it must be a very good pool.”


On the food side, the demand for healthier options, even during short-break holidays, has been probably the most noticeable trend in the past two years, says Gary Johnson, catering and development manager at Butlins.


“Our guests are keen to know more details about their food options; the fat content and the calorie count. Guests want to know that they have a choice, that they can have a treat as they are on holiday but also a few healthy meals,” he says.


The result has been the introduction of salad bars, more nutritional guides and a drive to cut down on less healthy food, particularly on children’s menus.


There has also been a drive to bring in high-street catering brands, which in turn can bring better customer recognition, economies of scale and consistency of quality.


Bourne Leisure, for instance, has tie-ups with Burger King and Harry Ramsden’s. Center Parcs, too, has placed a big emphasis on offering restaurant quality food rather than simply burgers and chips.


Future prospects


Planning restrictions, either on new sites or the expansion of existing sites, are a major issue for the sector going forward, argues BH&HPA’s Boston.


Much of the growth of the market, therefore, is coming from increased sophistication, niche marketing and expanding the number of weeks that are filled.


“It used to be that spring and autumn were quiet, but now occupancy levels in those periods are much higher,” he says.


Even at the more basic campsite end of the market, operators now commonly need to offer customers some form of café, restaurant, bar or food provision.


“People want something where they can get a taste of the outdoors but it is not too formidable. They want to be able to go and get breakfast or have somewhere where they can go and have a drink in the evening,” he says.


Another intriguing pointer, indicative yet again of the increasing blurring between so many of the different arms of the hospitality trade, is the opening in summer 2005 [August] of Butlins’ first resort hotel, the 160-bedroom Shoreline Hotel, in Bognor Regis.


There are also clear signs that, much as in the hotel sector, venture capitalists and City investors are now taking a close interest in the sector.


Center Parcs, for instance, before it went public, was owned by private equity firm MidOcean Partners.

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