There can be no doubt now that the sector’s plan to rely on the leisure dollar is starting to falter, something which the current wretched humanitarian situation in the oil-producing region is going to do nothing to help. As oil prices go up, optional spending falls.
In the UK, this will mean a focus on lower-cost breaks, but also the search for value and the reassurance of a decent brand as people look for their money to go further and mean more.
All of this came as Parkdean, something of a domestic bellwether in the sector, reported its results and commented on how it was expecting to see “strong staycation demand as seen during previous recessions”. For those who didn’t know we were in a recession, look away now.
CEO Steve Richards talked about being cautious when passing on increased costs while wallets were feeling lighter, and profits were down (although sales were ahead of pre-Covid levels, marking, he said, stability in the staycation market).
He added: “The business is well placed, following years of investment in the estate, the brand, and our people, to face up to these challenging trading conditions, and actions taken towards the end of 2022 to reduce our cost base and lock in pricing for key expenditure will mitigate the impact of further inflationary pressures.
“British consumers continue to demand multiple holidays and short breaks in a year, providing the ideal opportunity for Parkdean Resorts to extend the holiday season and improve occupancy in off-peak periods.
“Looking ahead into 2024 we remain cautious but note that the worst of the cost inflation is behind us, consumer confidence is gradually improving, and at time of writing, our forward 2024 holiday bookings are very strong. The business successfully refinanced its senior debt in 2023 and we look forward to making further progress as we continue to strengthen our brand, invest in our parks and accelerate the further digitalisation of the business.”
The message was similar from Beach Retreats, which reported 12% growth in longer stays of eight nights and more.
The study found that economic uncertainty was driving growth of short breaks of three to six nights, which had increased in popularity by 25% on the previous year. Stays of more than eight nights were 12% more popular than 2022.
Andrew Easton, managing director, Beach Retreats, said: “Beachside trips have remained popular this year, with guests seeking to make the most of their stays by enjoying the activities our stunning coasts-side properties have to offer.
“The UK leisure market remains a well-planned sector for travellers with the average lead time just under six months. However, the trend is moving more towards more impulsive planning, with the average lead time for all stays has shortened by 18% year on year.”
Caravans are at least a distraction from there being on deals in the sector at the moment, unless you count Motel One being back on the block (we don’t – Motel One being marketed is the equivalent of sale at the Gap. Its natural state). But with a nip in the air, we may see more companies think about huddling together for warmth soon.