Is the forecast bright for holiday parks in 2025?

After a tough 2024 with less-than-ideal weather, park owners are crossing their fingers for better conditions this year. Even if the weather isn't perfect all year round, a few sunny spells during key periods like Easter and the summer holidays could make a huge difference.

Another factor that could help the sector in 2025 is the lighter sporting calendar. Unlike 2024, which was packed with major sports events that kept people glued to their screens, next year should see more families heading out to enjoy park holidays.

Economic factors will come into play

However, we shouldn’t overlook the potential impact of some economic challenges on the horizon. The increase in the national minimum wage and National Insurance contributions could hit parks with lots of seasonal staff hard. To keep profits up, some parks might need to cut back on staff-heavy operations like bars, cafes, and letting fleets. Smart operators are already planning how to handle these changes.

Affordability is another key focus. Parks are finding creative ways to keep holidays affordable without sacrificing quality. We're seeing more double occupation units, where two families share one unit separated by a fire/soundproof wall, and a resurgence in fractional ownership schemes, which offer more flexible and budget-friendly options.

Consider sustainability

Sustainability continues to be a big consideration. More and more guests are looking for eco-friendly stays that let them enjoy and spend quality time in nature with family. Parks are responding by offering greener, more environmentally conscious accommodation.

More deals expected

On the market side, there's a cautious but noticeable return of private equity interest in the sector, similar to the boom years of 2021 and 2022. This could bring new investment and opportunities for growth. Parks are also focusing on second-hand caravans, part-exchange deals, and trade and upgrade offers to attract a wider range of buyers. Static caravan parks with development potential and established, sustainable income streams are particularly in demand. Residential parks with development potential are also highly sought after.

The golden goose in the market is the touring caravan park that can be converted to residential use, though these opportunities are rare and highly prized. Interestingly, lodge developments are currently at the bottom of buyers' shopping lists, reflecting a shift in market dynamics. While buyers are more cautious than during the 2021/2022 boom, they are more optimistic than in 2023 and 2024. There are plenty of buyers for the right park, although many bargain hunters are finding themselves priced out of the market.

Supply is expected to improve in 2025, but not enough to significantly disrupt the balance of supply and demand. This suggests a stable market environment for the coming year. Some operators are considering pushing their parks through before the end of the tax year, but this doesn't seem to be a major factor in deciding whether to bring a park to market. The likelihood of completing transactions before the next Capital Gains Tax increase is slim, so this isn't a primary driver for most decisions.

As we move into 2025, these trends will shape the holiday park industry, presenting both challenges and opportunities. By staying informed and adaptable, industry players can navigate these changes and capitalise on the potential for growth. Whether you're an operator or an investor, staying ahead of these trends will be the key to success for the coming year.

Further information

Contact Richard Prestwich

Holiday and Mobile Home Parks