A new report by Colliers International has revealed that a huge VAT hit, higher fuel costs and poor summer weather in 2012 caused holiday parks to struggle financially in the past year.
In the firm's third annual Caravan Park Sector Overview, it emerged that the industry had already been crushed by increasing fuel prices and bad weather spells, let alone the UK government's decision to impose VAT on caravan sales in April 2013. This has led to many park owners estimating that the unfavourable conditions within the sector will now continue for the rest of the year.
The guide looked at all major accommodation types across the sector such as residential caravan parks, camping parks, holiday homes and self-catering operations.
Richard Moss, director of Colliers' parks division, said: "Rising operating costs, coupled with fixed or reducing revenue, have eroded profits for many operators during the past few years. Although most operators predicted more of the same this summer, despite the recent hot spell, there is a worrying increase in the number of operators who felt the market had actually deteriorated over the past 12 months."
Mr Moss did note however that some clients are trading well and so the picture is not so bleak, adding that investment, use of social media and proactive management are ingredients for park success. Even if the number of families taking caravan holidays is falling, owners can still earn market share from competitors.
While the weather cannot be managed, predicted or controlled, Mr Moss adds that land owners must make the most out of what they have and focus on the services that they can operate. He said: "For touring and camping parks it is essential to make sure basics such as toilet facilities are as good as they can be and kept clean at all times - owners could see business literally going down the drain through damaging posts online."