Published on: 08 February 2024
Both the holiday park sector and marina sector have proven their resilience during turbulent times. The operating models are very similar and there are clear synergies between both sectors, providing holiday park and marina operators with an attractive opportunity to diversify their offerings.
The marina sector has a fragmented ownership structure, with most marinas being independently operated as private or family businesses, often as a lifestyle choice. Multi-site operators form a small proportion of the sector and there are perhaps around a dozen significant groups. This means that operators looking to expand will more likely be able to find individual sites to acquire and add to their portfolio than in the holiday park sector, which is now dominated by multiple site owners.
Marinas themselves can broadly be split into coastal or inland. Based on a recent study published by British Marine, inland marinas account for around 47% of the circa 570 marinas in the UK, but only around 37% of the number of berths, with an average of around 130 berths per marina. Inland marinas are increasingly characterised by a diversified business model and commonly include some level of holiday park offer in the form of static caravans, lodges or touring pitches. Some of the group operators favouring this diversified business model include the likes of Aquavista, Tingdene, Lakeland Leisure and ABC Leisure.
The reasons for the integration of holiday parks and inland marinas are twofold: from the customer’s perspective there is the convenience of having somewhere close by to stay if they own a boat in the marina, as well as it being an attractive setting for holidaymakers because of the wider amenities and picturesque views.
From the operator’s perspective, the clear operational synergies between the marina and holiday park sector business models present an obvious incentive for operators in one asset class to diversify into the other. Where adjacent holiday parks and marinas fall under single ownership, the operator is often able to drive higher pitch fees, while there is also likely to be a lower churn rate, which is attractive in a downturn.
The first key similarity between the business models is the income profile, the core element of which comprises the fixed annual fee receivable for owner-occupied moorings or pitches. The owner of a boat or static caravan/lodge is granted a licence in return for which an annual index linked mooring or pitch fee is payable. The annual fee provides the owner operator with a stable secure income stream, which offers a natural hedge against inflation.
The second major similarity in terms of the business model is the ability to pivot the make-up of income, depending on customer demand. In favourable market conditions, such as those seen in 2021 when there were higher levels of disposable income, many operators favoured a sales-led model. In the current market, many operators are favouring a more mixed or hire fleet-led model, with lower unit sales rates offset by greater demand for short breaks and holidays.
There is significant overlap in the skillset of the operator from one sector to the other and managing operational headwinds is a key area of focus at present. Given the escalating cost and more limited availability of labour, the dual-operator is more readily able to save costs through dual roles and flexible work arrangements in areas such as site maintenance and head office costs (marketing and finance etc). Central facilities and site infrastructure are significant costs - having one set of central facilities which serves both the marina and holiday park is advantageous.
Additionally, for marina operators the limited suitability of sites for marina use constrains the supply and pipeline of marinas. This is often a reason for diversification into holiday and residential parks, as marina group operators struggle to expand their portfolios.
From the perspective of both the customer and the operator, there are therefore a range of natural synergies between marinas and holiday parks, and we expect to continue to see operators in one market diversifying into the other in the coming years.
For more information on the services Savills can provide if you own a marina or holiday park, or are thinking of acquiring one, please contact: Kay Griffiths [email protected] / +44 (0) 7870 999 485