Christie & Co., a specialist business property adviser, has launched its annual “Business Outlook 2025” report, offering insights into key market trends, challenges, and forecasts for the coming year.
The report covers various sectors, including leisure, and reflects on the market activity and conditions observed throughout 2024. The analysis highlights how changes in taxation and employer costs, driven by the Labor Government’s Autumn Budget, will affect UK businesses in the coming year.
These adjustments are expected to increase financial pressures on operators across sectors, particularly in industries like leisure where consumer spending tends to be more discretionary.
In particular, the leisure sector is anticipated to face challenges in passing increased operational costs onto consumers. As discretionary spending may see resistance, businesses in this sector will need to focus on providing high-quality offerings and services in order to maintain profitability. The report suggests that this strategic approach will be critical to sustaining operating margins in 2025.
The report also highlights a notable rise in private equity activity during 2024, particularly in the holiday parks and marina markets. Christie & Co. observed a series of consolidation deals.
Buyer sentiment has remained largely positive, with expectations that interest rates will decrease at some point during 2025. This optimism is reflected in the high demand for leisure businesses, with plenty of buyers actively seeking opportunities. According to Christie & Co.’s annual sentiment survey, 73% of leisure operators plan to either buy or sell in 2025.
Despite challenges in the broader economic environment, 2024 proved to be a successful year for the leisure sector. In response to this market demand, Christie & Co. expanded its transactional team.
The company also continues to value a range of leisure businesses, including holiday parks, residential parks, and marinas.
Looking ahead to 2025, the report outlines several key market predictions for the leisure sector. One of the primary expectations is an increase in corporate mergers and acquisitions (M&A) activity, particularly driven by the anticipated drop in interest rates.
Christie & Co. also forecasts continued demand for marina businesses, particularly those with more than 200 berths. Further cross-sector acquisition activity is also anticipated, particularly in the marina and holiday park markets.
The forecast for the caravan and lodge sales market is also positive, with Christie & Co. predicting a more buoyant market in 2025.
In addition to market activity and consumer demand, Christie & Co. points to the government’s proposed planning reforms as a significant factor influencing the leisure sector. These reforms are designed to prioritize development and remove existing barriers for developers and operators.
According to a press release, Jon Patrick, director and head of Leisure & Development at Christie & Co., commented on the firm’s experience in 2023, describing it as one of the busiest years for transactions.
“2023 shaped up to be one of the busiest for us in terms of transaction numbers, and whilst the chancellor’s October budget increased operating costs for most leisure operators, those more entrepreneurial operators have come up with solutions and strategies aimed at minimizing their impact where consumers will not feel as though they are underwriting the entire cost,” Patrick explained.