Rising temperatures. Issues at Dover. Issues at Gatwick. The travel industry is turning upside-down, but one thing is clear. Now is the best time to buy a campsite – staycay is the new Vacay.
More and more people are ignoring the difficulties of overseas travel in favour of the humble British campsite. There’s never been a better time to join this growing industry. The British public recognises that campsites are no longer the domain of the eclectic hobbyist, and there is a range of options to suit their own level of outdoorsy. Whether it’s a tent in the wilderness or a yurt with all the creature comforts. According to the last Global Tourism Survey, the UK takes over 13m camping and caravan holidays per year. These numbers are expected to explode in 2022.
This has naturally led to a renewed interest in purchasing campsites and caravan parks across the board. We at ASC Finance for Business have certainly seen a fair few more applications coming across our desks. However, like any specialised industry, there are a few elements you need to be aware of when you’re looking at financing your purchase.
Pick the Right Site
There are various kinds of campsites, and each one has a different income model. This is vital to be aware of in terms of your cashflow requirements, and how lenders will evaluate you for finance. Take your classic campsite/glamping site. Where clients are coming to rent a pitch for the week or weekend. These operate under a fairly traditional business model, with upfront and ongoing maintenance costs, and a regular (if seasonal) flow of income. By contrast, a static caravan park involves larger assets, bought and sold with one-off payments. You can expect higher capital expenditure, with income being driven by sales of individual units. This will in turn affect the criteria lenders use to assess your application, with less of a focus on regular income than other ventures.
If you’re looking for a camping-based investment, make sure you’re clear on what style of business you’re looking for, and refine your searches appropriately.
Be a Legal Eagle
Running a campsite or caravan park isn’t as simple as just taking a plot of land and stating “People Can Camp Here”. There are a variety of rules and regulations surrounding what you can and can’t do with your site. For starters, you’ll need a specific license for the type of venue you’re running. Be aware, caravan park licenses and campsite licenses are not interchangeable. You’ll also have to contend with zoning laws and any other situations that may arise. As a result of having clients bringing their own lodgings to the property.
Go with the – Cash – Flow
Campsites and caravan parks are a highly seasonal business. If you’re not sure, pitch a tent in your back garden next Christmas and see if you’d like to sleep in it!
By and large, you’ll find many more willing customers in the summer than the middle of winter. As such, make sure you’ve got a plan to manage the ‘famine’ periods properly, to make sure you can benefit from the ‘feasts’ that will come when weather changes. This is especially true as you’re establishing the business and settling in. There are lots of approaches to take, whether it’s careful financial management, digging into your savings, or even working capital loans. Review the options with a specialist, make sure you know what to expect, and plan accordingly.
These questions will get you started on your journey to pitching up in the campsite industry – but be aware there are lots of other aspects you need to consider when choosing and purchasing a property. It can be a complicated road, and it’s worth getting some help along the way. Consider talk with ASC to experts. ASC Finance for Business, are Commercial, Business and Property Finance Brokers, who have been arranging faster, simpler, better finance for small businesses for more than 50 years. To speak to your local ASC Regional Director about getting finance, click here.
Other options you may be interested in
In addition to campsites or caravan parks, you may be interested in a bed & breakfast, holiday cottages, hostels, ski chalets, or even self catering options.
