For many caravan park operators, Easter was more than just a long weekend punctuated by an overabundance of chocolate – it’s the exact moment the season wakes up from its wintry hibernation and the all-important preamble for peak season, which is now just a few weeks away.
Whether it’s families making the most of the Easter school holidays or regular visitors returning to their favourite secluded spot, spring typically marks the start of the holiday season. But with rising fuel costs making families rethink their holiday plans, how can park owners ensure a successful summer?
Why peak season performance is paramount
For many operators, the brief window between the start of spring and the end of summer accounts for the majority of annual income. It’s estimated that around 70-80% of holiday park and campsite profits are generated over the summer months, as long winters give way to an intense burst of activity.
While the full impact of the ongoing conflict in the Middle East is still unfolding, this spring will be a good litmus test for what we hope will be a good summer, despite the uncertain global outlook.
Holiday parks are well-positioned against economic shocks
The previous economic shock that affected the UK from late 2022 onwards saw a cost-of-living crisis, rising energy costs and market turmoil, but the UK’s holiday park and campsite sector still generated around £12.2 billion in visitor spending in the following year, according to the National Caravan Council (NCC). This was an increase of £2.9 billion on the previous year, demonstrating the resilience of the sector.
The logic isn’t hard to see. For many, holiday parks offer an affordable alternative to more expensive overseas holidays or hotel stays, so the sector may be well positioned as the impact of conflict in the Middle East increases.
However, the Easter holidays will be the first chance to see whether this pattern is repeating, so operators should carefully look back on the holiday period to see how it compares to previous years.
The last chance to prepare
While it’s often too cold or damp to carry out in-depth maintenance throughout the winter months, spring’s temperate nature and upswing in guests ensure that any areas in need of a little TLC are highlighted in time to be improved.
Whether it’s maintenance work, landscaping and facility upgrades or safety checks, these critical tasks can be difficult to complete over winter, so the short window between the school holidays is the ideal time to prioritise these. Add to this the fact that operators are likely to be actively recruiting and more aware of the impending need to train their next cohort of seasonal teams during this time, and suddenly, the spring sows the seeds for a hotbed of activity.
One of the first things operators should do is to produce an up-to-date cash flow forecast, which takes into account income from the Easter break. This can help operators to understand when pressure points may arise later in the year and whether short-term financing or staged spending might be necessary. It may seem onerous, but swatting up on the books now can yield dividends during an unpredictable year like this. Clearly, once the season begins, revenue can build quickly. The difficulty lies in bridging the gap between pre-season investment and peak summer income.
Maximise profits by adjusting pricing and predicting revenue expectations
One of the most valuable exercises ahead of the busy summer season is a simple one: learn the lessons from the previous season to help you prepare for the next. This time, I would encourage you to also look back to the lessons learned from 2023, during the previous cost-of-living crisis.
Taking the time to review past occupancy levels, average spend per guest and peak booking periods can reveal useful patterns, allowing you to predict with more accuracy, play to your strengths and, crucially, to shore up your weaker areas before the park is at capacity.
Doing this in spring can be particularly telling, as you are likely to see early indicators of what will and won’t work well in the dizzying height of summer. With this research under your belt, some parks may make the surprising discovery that their busiest weeks are shifting, while others might see that shoulder seasons are becoming stronger as guests seek better value breaks with less background noise.
You may also identify opportunities for maximising your potential income from each visit. The UK Caravan & Camping Alliance confirms that holiday park visitors typically stay around 82% longer than the average UK tourist trip across other types of accommodation, and they also tend to spend more money during their visits.
So, whatever the situation on your site, this creates an opportunity. Longer stays can mean robust revenue, but only if your pricing structures are accurately aligned with current demand and rising operating costs. Even the most modest adjustments to your pitch fees or accommodation rates can help to ensure the season remains profitable, rather than just busy.
Taking the time to ensure tax compliance should also form part of this seasonal financial planning. Operators must understand the VAT variables across accommodation, entertainment and on-site amenities, especially when investment in infrastructure or facilities may qualify for capital allowances.
This season will be tough for many businesses and families across the UK, so preparation done in the early days of the spring season is essential. Reviewing visitor numbers and behaviours, checking finances, forecasting cash flow and understanding all of your tax obligations early can help to ensure that the months ahead are as commercially sustainable as possible.
Duncan & Toplis provides accounting services designed to support businesses in the leisure and tourism sector, including caravan park operators. Services include tax planning, financial forecasting and seasonal cash flow management. To find out more, visit www.duncantoplis.co.uk.
By Michele Coe-Baxter, Director and Head of Leisure and Tourism at Duncan & Toplis
