Why the staycation market is here to stay

Why the staycation market is here to stay

  • Fabrik Invest outlines long-term strategy for UK holiday let investment
  • UK staycation spending estimated to reach £7.1 billion this summer (up 22% on 2019)
  • Occupancy forecasting at pre-pandemic levels is essential to success
  • The Hideaway by Liv Lodges showcases long-term potential of holiday let investment

Pandemic-related travel restrictions are driving a staycation boom in the UK, as families turn to lodges, holiday lets, caravans and campsites to enjoy their downtime this summer. Mintel estimates their collective spend over the summer will total £7.1 billion – 22% more than during the same period in 2019.

Investors are also rushing to be part of the trend, but what will happen once international travel opens up again? Is the staycation market really here to stay?

According to the team at Fabrik Invest, it most certainly is.

“There’s an exciting long-term future ahead for UK holiday lets. The current staycation boom has served to focus attention on this type of investment and its advantages. Over the longer-term, holiday lets provide one of the highest yielding types of property investment, while also providing benefits that other property investments don’t, such as 0% stamp duty and Furnished Holiday Let tax breaks.”

Dale Anderson, Managing Director, Fabrik Invest

Understanding the longer-term nature of the investment involves a range of considerations. At The Hideaway by Liv Lodges, for example, forecasts have been based on an average of 65% occupancy throughout the year. This is a pre-Covid occupancy level; many lodge parks are currently operating at 80% occupancy or higher. By basing income projections on pre-Covid levels, investors can be assured that the long-term forecast is a realistic one.

Interestingly, another factor at play is the shift to remote working. While this is something that many employees have had thrust upon them as a result of the pandemic, it’s also a trend that looks to be here to stay. A survey by HR software company Personio earlier in 2021 found that only one in three UK workers had returned to the office at least part-time (compared to 59% of workers surveyed in Europe). This continuation of home-based working means that companies need to find other ways to ensure their employees connect. For many, corporate breaks will be the ideal solution.

“Corporate clients will be a key market for many superior holiday parks over the years ahead. Wellness breaks designed to help employees connect with each other while also enjoying the benefits of the great outdoors have an important role to play in the way we approach a more hybrid office/home working arrangement. Off-season corporate breaks like this will help to raise the occupancy levels of park resorts during times when they would traditionally have been quieter.”

Dale Anderson, Managing Director, Fabrik Invest

The Hideaway by Liv Lodges is well-positioned to serve this growing demand for UK-based corporate breaks. Set in the lush Lincolnshire countryside, on the doorstep of the superb spa and golf facilities at Woodhall Spa, the luxury lodges come complete with their own outdoor space with hot-tub. The Hideaway is also home to an on-site gym, games room with table tennis and pool tables, children’s play area, Xbox and PlayStation room, farm shop, restaurant, bar and coffee bar, while the local area provides walks and trails, boat and bicycle hire, river fishing and more.

Holiday parks will, of course, continue to serve those looking to holiday in the UK. Travel restrictions aren’t likely to be fully lifted for quite some time. Even with the rollout of vaccines, countries are experiencing the pandemic in different ways, with waves of infections rising and peaking at different times. There’s a very long way to go before international travel delivers the freedom and choice that it used to.

“The longer-term nature of travel restrictions means a staycation boom not just for this summer but in all likelihood for next year too, and potentially the year after. Even once restrictions are lifted, we anticipate that many families will still feel reluctant to fly and so will look to take breaks in the UK instead. Add to that those who choose not to fly for environmental reasons and those who can’t or won’t have the Covid-19 vaccine, and so likely won’t be able to fly, and the long-term prospects of the holiday let market here in the UK look very healthy indeed.”

Dale Anderson, Managing Director, Fabrik Invest

For investors currently looking at the holiday lets market for the first time, the Fabrik Invest team advises opting for a property that uses pre-pandemic occupancy levels in its forecasting. This should provide a realistic long-term view of potential yields. Finding an investment that has a reputable management company in place (The Hideaway uses established operator Sykes Holiday Cottages, for example) is also important for those looking for a well-managed, hands-off investment.

Finally, it’s also worth looking at what is offered in terms of personal usage – this is another benefit of choosing a holiday let investment over and above one such as buy-to-let.

For more information, please contact Fabrik Invest on 020 8175 9891 or enquiries@fabrikinvest.com or visit http://www.fabrikinvest.com