With the ongoing focus on regional travel due to COVID-19 restrictions, caravan parks have emerged as an attractive property investment option.
Ray White’s head of research, Vanessa Rader, revealed that demand for domestic tourism, including caravan parks, has increased over the past four years, excluding lockdown periods.
The national occupancy average (for caravan, camping, and cabins) for 2022 was 61.5%, well ahead of 2019 (pre-COVID) results of 49.4%,” Rader said.
She added that occupancy remains strong in 2023, and many buyers are considering these assets for both current use and future land-banking opportunities.
“The viability of caravan parks as an investment looks sound, particularly due to their long-term potential, coupled with domestic tourism levels continuing to increase as the drive segment grows,” she said.
The high cost of airfares and accommodation has contributed to the rising demand for caravan parks and campgrounds, keeping vacancies low and the prospect of continued rate increases high, a report by the Canberra Times said.
However, Rader cautioned that rising interest rates might result in some softening in values and an expected reduction in investment activity during 2023 as quality assets remain tightly held.
COVID-19 and restricted international travel have undoubtedly fueled the growing interest in purchasing caravan parks, according to ResortBrokers’ Chris Kelly.
He noted that larger caravan park groups are looking to expand their portfolios, while the construction of more cabins for long-term workers in regional districts has also increased. Since 2017, ResortBrokers has sold 52 caravan parks, totaling $144 million in sales.
Tim Symes of Tower Business and Real Estate advised potential buyers to first consider the location and growth potential of a caravan park before purchasing. He mentioned that there is currently a lack of caravan parks available on the market.
“Springtime is typically the busiest time for us every year. The industry has had growth-on-growth even through COVID,” he said. “It just shows how the Aussies love to have a holiday, and caravans and cabins are a big part of that.”
For caravan park owners and operators looking to capitalize on the increased demand for domestic tourism and attract further investment, enhancing the customer experience is crucial. Consider investing in modern amenities, upgrading infrastructure, and offering unique experiences tailored to the interests of your target demographic.