NO DOOM, NO GLOOM, JUST BOOM

While most clubs moan about the smoking ban and supermarkets, Park Holidays, a UK-based holiday park company with social clubs on all 25 sites, says life is rosy and getting better by the day. MATTHEW MOGGRIDGE talks to sales and marketing director, Tony Clish

In the current economic climate, it’s hard to fin optimists who are willing to testify that life is rosy. A the moment, the only glint of good news is that from Chile where 33 miners were winched to safety recentl wearing a big smile and a pair of dark glasses.

In the UK, where the nation awaits the coalitio government’s miserable - and, some would argue ideologically-based - austerity measures, there is a fou mood brewing, not least because the government in power ha a tiny majority, nobody likes having their budgets cut an traditional Lib-Dem supporters are up in arms about the party’s uncomfortably close association with the Tories. In clubland, while there is still plenty of moaning abou the smoking ban and how the supermarkets are making lif hell on earth, there are associated sectors of industry tha are bucking the trend - and on the look-out for new recruits.

Holiday parks are a case in point and Park Holidays UK provides just one example of how clubland might exist in a parallel universe. The company owns 25 holiday parks, predominantly in the South of England, and it looks as if things couldn’t possibly get any better.

Holiday parks are an interesting sector of the leisure industry. Most of the parks have been in existence for between 40 and 60 years and, because of their size, it is difficult for operators to get planning permission for new sites. Instead, there is plenty of acquisition going on, with companies like Park Holidays buying up sites owned by independent operators.

Most holiday parks are in beautiful locations, according to Park Holiday’s sales and marketing director, Tony Clish, who said it would be difficult to get planning permission today for most of the locations already operating; and that is why park operators tend to expand by acquisition and not new-build.

From a consumer perspective, holiday parks offer low- cost UK holidays; and the experience is becoming even more appealing as operators ‘up their game’ in terms of the facilities on offer. Interestingly, the banks look favourably upon holiday parks because of their healthy cashflow situation generated by pitch fees from static caravan ‘owners’. According to Clish, the financial institutions look upon holiday parks as a property investment and, therefore, a relatively safe bet.

Park Holidays was established in the mid-80s but changed ownership in 2006 when its entrepreneurial owners sold the company to private equity buyers, who provided new management and new capital to take the business forward.

Revenue streams
In the UK today there are approximately 3,500 holiday parks, most of which are independently owned and handed down from generation-to-generation. The big player in the market is Bourne Leisure, owner of the Butlin’s and Haven brands. A good example of an independent operator at the top end of the scale, would be Ribby Hall Holiday Village in Lancashire, a past Club Awards winner. “Ribby Hall is a good example of a well-invested holiday park,” said Clish.

There are three main revenue streams for holiday park operators: long-term pitch fees from owners; seasonal holiday lets and, of course, revenue from on-site retail spend. All parks operate one big clubhouse, which is licensed as a club and relies upon membership cards, which act as a control mechanism for other on-site areas, such as the swimming pools. Park customers have to be a member to gain access. Typically, a park clubhouse will consist of two bars: one for adults; and a larger area with a stage for early-evening children’s entertainment and inter-park bingo. After the bingo, live acts vary from comedians and singers to versions of West End musicals.

Clish said there were similarities with traditonal working men’s and social clubs and that career opportunities existed for the right people. A club manager, for instance, could work his way towards a general manager role and be in charge of a holiday park.

Long-term licences for up to 30 years provide a good, solid source of revenue for park operators and enhance cashflow.

“Most parks open for 10 months of the year from the beginning of March to the end of October, but by increasing the quality of insulation and double-glazing, we are beginning to see extended use through the winter period,” said Clish.

Park Holidays has acquired a number of independent parks in recent years, according to Clish, three of which have planning permission for expansion. Outside of acquisition, the main development route has been to invest in existing facilities. Clish says that the industry has witnessed some major investments in recent years resulting in some impressive facilities for holidaymakers, such as fitted kitchens.

According to Clish, holiday parks attract a wide-ranging demographic, but have a large number of retired and semi- retired people taking on a more permanent residency, normally after taking family holidays at a particular site .

“Very often, people live within an hour and a half drive from a park and those who buy often sub-let their caravans when they’re not using them. Most operators offer professional managed letting opportunities,” Clish said.

Renting a static caravan ranges in price depending on the time of year. Off-peak prices hover around the £150 per week mark, but during peak times the price rises to £700. Clish said that while, traditionally, a holiday park vacation involved self-catering, a big growth area has been half- board arrangements involving breakfast and evening meal packages discounted from the park’s fixed menu.

Over the past two years, sales growth at UK holiday parks has been phenomenal, according to Clish. He claims that repeat business is strong and that 2010 has been a good year for his company, Park Holidays.

“At a time when a lot of industries are facing challenging times, it’s good to think that the UK holiday parks industry could play a major role in the economic well-being of the country,” Clish said, adding that he would like to see the Government and Local Authorities supporting policies that promote the expansion of existing sites. “Our collective spending power, our level of spend, in local shops, restaurants and supermarkets, creates jobs in coastal communities,” he added.

Clish believes that the healthy position of holiday parks, particularly Park Holidays, is down to investment in on- site facilities and customer service. While he agreed that, in the past, holiday parks per se had suffered from image problems associated with spoiling the environment, today’s operators are busy developing strong relationships with local communities.

“A lot of the old-fashioned holiday parks were laid out in the 1950s with little regard to environmental factors,” Clish said, arguing that Park Holidays’ recent three site extensions had all been based on strong collaborations with local people who were allowed to agree site layouts and landscaping to ensure the site sat comfortably within the lie of the land. “It is possible to be in harmony with the locality,” he said.

In Devon, Park Holidays recently received planning consent to double the size of a site in an area of outstanding natural beauty. The plans were well-received by Torbay District Council who, Clish said, had the ‘right attitude’. “It’s wrong to be complacent, but there are plenty of future opportunities,” he said.

Clish said he welcomed the current process of consolidation that is happening within the holiday park market as a whole and is pleased that volume sales at Park Holidays’ retail outlets over the past three years have been steadily increasing. He attributes the company’s success partly to investment, but also to a central pricing policy and the growth of on-site entertainment .

“We have quite a low price point on food and we need to factor in the menu choices to make sure we can deliver the right product at the right price. There’s a lot of frozen and microwaved food as well as seasonal dishes, and we bring in healthier options too, but we don’t have the same throughput as major high street chains, so staff overheads in the kitchen are proportionate to the top line,” Clish explained.

He said that television’s Hairy Bikers have done a few things on Park Holiday sites and there has been an approach by the maker of Spam to run cookery competitions focused on the product. Don’t expect Michelin star food, though!

“We have one main supplier (3663) and we negotiate centrally, but try to reflect regional tastes where we can,” Clish said, adding that the main focus is on national brands. Where wet sales are concerned, for example, there is no cask ale offering.

Supermarkets stealing custom is not an issue for Park Holidays, according to Clish. While he admits that the phrase ‘captive market’ distorts the reality, he said that there are no other operators within a half a mile of a park and that people tend to stay on-site. “Depending on the size of the park, we have gone towards the petrol station model. The park reception area is open long hours and so is the shop and it works well,” Clish explained.

For Clish, the biggest challenge is doing a lot of little things very well and making sure that staff at all parks focus their attention on the customer. “We’re always listening to customers, conducting research, spreading best practice and looking for ways to improve the business,” he said.

All sites offer Sky HD on big screens and, while the World Cup proved a disaster for a lot of clubs, Clish said that it went down well in Park Holidays’ 25 sites. “We planned for it, we created themed events and drinks promotions and were fairly pleased with the result,” he said adding that the tournament caused a slow-down in bookings - until England was knocked out. “Then bookings went through the roof!” said Clish.