Our head of rural leisure looks back over how the last two years has been for a leisure business for sale, and discusses whether the staycation might be here to stay.
Reflecting on the last two years, the holiday letting market, along with all of our lives, has dramatically changed due to the Covid-19 pandemic. From March 2020, during the first lockdown, leisure businesses were unable to trade until they were allowed to re-open in July 2020. During this time, the grants, business rate relief and VAT reduction were a lifeline for the holiday letting industry. But, as soon as the holiday letting market reopened, just in time for the summer months, holidaymakers competed to find accommodation, leading to a bumper season for clients and owners of leisure businesses.
The subsequent ‘rule of six’ affected the larger holiday lets, such as the ‘Sleeps 10’ market, and was painful for these owners. On the other hand, restrictions on foreign travel made the UK holiday, nicknamed the ‘staycation’, the only option, leading to a surge in demand to the extent that people struggled to find accommodation throughout the year.
As restrictions lifted in Wales and Scotland, people travelled further afield for holidays, and traditional locations near the coast and within the National Parks were extremely busy, encouraging holidaymakers to explore different parts of the country to get away from the crowds.
What type of leisure business for sale did well in 2021?
market saw a boost in trade as holiday cottage complexes were fully occupied. New businesses sprung up, especially campsites
taking advantage of the extension of the 28-day rule to 56-days
introduced by the government to help campsites provide extra capacity and to recoup their losses.
As the restrictions were revoked, demand fuelled the market and led some clients to increase their prices to regain some of the losses they had incurred earlier in the season. Some clients honoured their pricing levels and accommodated their guests to the best of their ability, but most businesses looked to increase their tariffs in the 2021 season.
Demand in 2021 again outstripped supply and all sectors of the holiday letting market including holiday cottage complexes
, lodge parks
, campsites, caravan parks
and glamping businesses have had a bumper year with almost full occupancy, and have been inundated with enquiries.
Many clients wanted to sell to cash in on the increase in values, driven by demand for leisure business for sale. Many decided to bring their retirement plans forward by a couple of years, as they felt that the market was strong and they would be able to maximise the price of the sale of their leisure business.
What will 2022 hold for leisure businesses for sale?
Looking forward to the 2022 holiday letting season and how this will affect prices for the sale of properties of this type is difficult to predict. I can only see the market improving as new corporates and individuals look to invest into this market due to the levels of demand for staycation accommodation.
We have seen hotel operators looking to diversify their portfolio into the self-catering market following a decrease in their trade during 2020 and 2021 due to shared facilities such as reception areas and dining rooms being unpopular with guests. The self-catering market is hopefully more robust in the light of the Covid-19 pandemic thanks to the accommodation being self-contained.
Larger landowners, such as rural estates, have been investigating the rural leisure market and have had reports undertaken by Carter Jonas to help them identify the market, levels of demand and the type of accommodation that suits their location. Most clients are concerned and require further information on the cost of capital expenditure to start businesses within this sector against the returns that they can achieve via the various holiday accommodation types.
The Omicron variant is going to put extra pressure on the government to enforce further travel restrictions throughout 2022 and, with this uncertainty, the likelihood looking forward is that the staycation is here to stay for the foreseeable future.
If you’re thinking of a change in lifestyle, want to expand your existing portfolio, or sell your leisure property while the market is strong, Carter Jonas is well placed to help you.
Check out all our leisure businesses for sale here >>
If you’re thinking of buying or selling a leisure property, contact Stephen Richards, our head of rural leisure, on 07968 216596 or firstname.lastname@example.org.