Amid growing economic pressures, holidaymakers are increasingly turning to caravan parks as affordable vacation destinations, resulting in a substantial rise in industry revenue.
Data from BDO indicates that between December and February, holiday parks generated an average revenue of AU$641,000, marking a 12% increase from the AU$573,000 recorded in the same period the previous year. Occupancy rates also improved, with a 2 percentage point increase to 49%.
The trend continued over the Easter holidays, which proved to be lucrative for holiday park owners. Average revenue during this period grew by 9% to AU$56,000, compared to the prior year, while occupancy rates remained steady at 76%, as reported by Commercial Real Estate Australia.
“The latest data suggests that holiday parks remain a very attractive option particularly as household budgets are tested,” said Angus Strachan, a business services partner at BDO.
Historically, the sector has faced significant challenges, particularly from natural disasters and global health crises. The bushfires of late 2019 and early 2020 severely impacted revenues, as did the subsequent pandemic lockdowns.
However, the sector experienced a robust recovery in 2022, driven by a surge in domestic travel as overseas travel options were limited.
The geographic distribution of revenue over the summer months reveals a national total nearing AU$900 million, with an increase of 3.7% across the board, except for Queensland.
New South Wales led with a significant AU$328 million in revenue, a 4.1% increase from the previous year, followed by Victoria and Queensland, highlighting regional variations in economic recovery and consumer preference.
In-depth analysis of occupancy rates offers insights beyond the surface numbers. While a 49% occupancy might seem modest compared to hotels and resorts, which often boast rates of 80% or higher, this figure is skewed by the inclusion of unpowered sites. These sites, which require minimal overhead but can accommodate large numbers, generally have lower occupancy rates.
“To put things into context, in Easter, occupancy for cabins was 81.6%, powered sites were 83.2%, and unpowered sites were 58.3%,” Strachan explained.
The holiday park sector’s appeal has attracted substantial corporate investment. For instance, a park near Hastings Point on the NSW Tweed Coast was recently acquired for a record AU$50 million by Tasman Holiday Parks.
This trend is indicative of the sector’s profitability and growing mainstream appeal. Moreover, major operators like G’Day Group and Tasman Holiday Parks have rapidly expanded their portfolios, now valuing over AU$1 billion and AU$500 million, respectively.
The Caravan Industry Association of Australia’s latest quarterly update sheds additional light on the sector’s dynamics.
“Despite rising outbound international travel numbers, there was a small increase in overnight caravan and camping trips in 2023, amounting to 15.2 million, which is 9% higher than in 2019,” said Stuart Lamont, chief executive of the association.
The industry is not just surviving but thriving, with dynamic pricing models and continued investment in facilities. These strategies have helped parks adjust to fluctuating demand and maximize revenue. Recent tax incentives have also spurred improvements in park facilities, enhancing the overall customer experience and boosting popularity.
Looking ahead, the outlook for holiday parks remains positive with expectations of continued demand.
“As an industry, we are still very happy to see that Australians still love visiting their country, hitting the road and enjoying their favorite regional and rural spots,” Lamont commented.
The sustained popularity of holiday parks underscores their role as a vital component of the national tourism landscape, offering a value-for-money proposition that is likely to retain its appeal.
The rise in holiday and caravan park revenue is a clear indicator of their growing importance as affordable vacation alternatives for budget-conscious families.
The industry’s resilience in the face of economic and natural challenges, coupled with strategic corporate interest, suggests a strong future trajectory. Holiday parks continue to support regional economic and employment opportunities, thereby contributing to the broader economic fabric of Australia.