Nick Dyson, Commercial Property Manager at Blacks Solicitors, discusses the increase in stays in the wake of the pandemic and what to watch out for if you are considering purchasing a vacation park.
With overseas travel still under tight restrictions due to the current Covid crisis and the impact of Brexit, it looks like staycations are set to be a big trend for the rest of the year.
According to gîtes.co.uk, four in five Britons (84%) plan to stay in 2021.
We’ve already seen the positive impact of the vacation boom on many businesses, including Hull-based vacation home maker Willerby, which recently announced it was hiring over 100 people to meet growing demand for vacation homes. In fact, Park Leisure recently revealed that more than three-quarters of Britons (77%) now aspire to own a holiday home in the UK.
Now more than ever, people are looking to invest in this booming industry and are considering buying or selling park businesses.
To buy or not to buy?
As foreclosure restrictions ease and consumer confidence grows, and people look to vacation in the UK as overseas travel continues to be difficult, the industry is expected to become more profitable and it will become more profitable. could therefore be interesting to consider the acquisition of a business of parks.
If you are looking to expand your portfolio, invest in a new business, or just try something new, a parks business is definitely worth considering. However, it is important that you are fully aware of each step involved in purchasing a park and that you are in the right place personally, financially and professionally to take the next step.
Once you’ve decided that buying a park is the right decision for you and a deal has moved forward, it’s important that you consult with your accountant on how best to structure the deal.
There can be significant differences in capital deductions, stamp duties, VAT, and relief available depending on how you allocate ownership and trade agreements. While it may seem confusing at first, a good accountant needs to spell out exactly what you need to do in order for the deal to close successfully.
Once you’ve identified a park, consider the real estate aspect of the purchase. Have you checked the limits and plans? Have you taken into account the problems that might arise?
Sites are often large and sometimes what is on the ground may not match what is on the cadastral plans. Informal rights may also have been granted to neighbors and it is essential to make sure that your position is clear.
Your planning and licensing position should be up to date and precise. The site license must match the number and type of units allowed, otherwise you may have difficulty.
Keep in mind that there can be additional value in potential development as well – identify this early so you can progress as early as possible.
Make sure you understand who is employed in the park and what personnel are essential to the business.
Some park wardens may earn modest salaries, but have great customer relationships and play an important role in making sure patrons are happy. Encourage staff with various perks, such as good vacation pay and reward programs based on positive customer feedback, to retain and attract new talent. This will keep your fleet profitable.
Check your systems and booking arrangements for operating the park and be sure to identify areas for improvement.
It is also crucial to conduct an audit of contracts already in place that are essential to the functioning of the business and to examine how these arrangements can be continued after purchase and, if necessary, amended.
Check the licensing agreements in place with the caravan owners in the park. For example, is each location occupied under identical terms and are all terms written down? This will give you certainty about the obligations of caravan owners on a wide range of issues (including the payment of site fees and the sale of the caravan).
For more information on buying or selling a vacation home park, contact Blacks Solicitors at www.lawblacks.com.