Worldwide: Investors have proved that their appetite for domestic-focused self-catering businesses is not a passing pandemic fancy.
Center Parcs UK is the latest business to consider a sale, with an expected price of £4 billion, illustrating that brand remains an important factor in any deal.
The slide rule being passed over Center Parcs comes as Beach Retreats is due to begin development on a 40-unit community in Hayle, near St Ives. The project will have direct access onto the beach and will consist of 40 units, a mix of one-, two- and three-bed apartments and beachfront bungalows, supported by a new water sports centre.
Investor interest in the sector began almost as soon as hotels were forced to close, with the acquisition of seven Center Parcs Europe holiday parks by Aroundtown for close to €1 billion, KKR buying Roompot for €1 billion and InfraVia Capital Partners picking up Sandaya for an undisclosed fee. This was followed by Blackstone acquiring Butlin’s parent company, Bourne Leisure.
Ben Harper, group managing director, Watergate Bay Hotel, Another Place and Beach Retreats, said: “The domestic business isn’t a new one, we had been booming before the pandemic. I’m confident of the short term, but I feel even more confident about the medium to long term. There is such an inconsistent landscape in the UK – and no leading brand – which presents a great opportunity.
“There is a dearth of brands in the sector, but we have found that a flag which resonates with the guest is the only way to drive high levels of direct distribution and fuel short-term returns and medium- / long-term asset value.
“We are developing purpose-built aparthotels where we blend the best of self-catering with hotels, focusing on the lifestyle sector which has flourished in recent years. The market in the UK has not kept pace with the demands of the mass-affluent travellers who are now holidaying within its shores and although the accommodation industry has expanded rapidly in recent years.
“As we saw with the Roompot deal, with the Sandaya deal, these leisure-driven outdoor offerings are the stories investors are finding interesting and looking at the demand we have seen in the past few years from guests leads me to believe that we can create the country’s largest lifestyle self-catering brand,” he added.
Center Parcs joins Parkdean Resorts and Forest Holidays as potentials for sale, with private equity houses circling as they search for strong businesses which have proven their worth and can form platforms for further growth in this resilient sector.
Harper continued: “Where these businesses are successful is where you reduce seasonality and create lifestyle through brand. We have seen demand grow from traditional holidaymakers across a range of demographics, but also from people looking for a different option when working from home.
“This multi segment-approach creates year-round demand,” he added.
The latest PwC research showed that 37 per cent of people plan to holiday within the UK in 2022. On balance, it was expected that overall staycation demand would be similar to the summer of 2021 but be more evenly spread throughout the year. High occupancy rates were expected to help regional hoteliers raise their ADR [average daily rate].