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Holiday Home Editorial – April 2020
Figures released by the National Caravan Council (NCC) show the January 2020 moving-annual-total for holiday homes production was down 4.7%, at 20,791 units.
Traditionally at this time of the year, business within the holiday home market increases. The market expects to experience a higher volume of demand and sales, especially after the decent summers experienced in recent seasons and the rise in the ‘staycation holiday’. However, the coronavirus (COVID – 19) looms large, affecting everyday life. The recently announced Government lockdown, leading to the closure of holiday and touring parks will be devastating for all involved with the industry. Hopefully this action will have the desired impact on the spread of the disease and businesses can open again quickly.
The UK New Holiday Home Market
Before the arrival of COVID-19, demand and sales of new holiday homes remained at the same slow pace it experienced at the beginning of the season. Feedback Glass’s received suggests the market experienced a healthy pick up in sales in January. Although, the market usually sees an annual spike in January, the increase in sales was most likely due to the resolution of political and economic uncertainty, following the general election.
How the Brexit process has affected the market, and how the continuing EU trade negotiations will impact us all once the UK leaves has been a regular conversation for over three years. The general consensus it that is has affected holiday home sales by denting consumer’s confidence to buy, whilst the economy has been so uncertain. A positive view is that it has increased stay at home holidays with research conducted by Barclays showing 31% of people surveyed were planning to holiday domestically.
The ‘post-election boost’ did not carry through into February, which was a surprise among many, who believed it could increase business into spring. According to feedback, sales became ‘hard work’ again reverting to similar numbers achieved before the New Year.
Caravan, Camping & Motorhome Show
Glass’s editors attended the Caravan, Camping & Motorhome show at the NEC, Birmingham in February. The majority of feedback received was that sales were ‘OK’. The market’s inconsistency is making it difficult for parks to predict market movements. This is causing parks to order with more caution, which in turn is impacting manufacturers.
The overproduction of stock over the past two years remains a hindrance to the market. Large volumes are still for sale at highly discounted prices. This is distorting market values. Manufacturers have reacted to this by reducing production, as seen in the NCC statistics. There is confidence that one more year of lower production will help even the stock issues out.
Despite concerns of rising cost new prices each year, larger models, especially 14ft+ have been selling well. Consumers continue to be attracted to premium models in the market, and feel, most importantly, that they are obtaining value for money. Glass’s regularly receive feedback that part-exchange is low, however the improvements to the standard of holiday homes is giving owners fewer reasons to upgrade to a new holiday home.
At the other end of the market, sales of entry-level model ranges are stuttering. Attracting younger customers with families to the market is a growing problem. The budget model ranges that could create an attractive proposition are still seen as unaffordable. Unfortunately, there is no real solution in sight to reignite demand from these younger customers.
The UK Used Holiday Home Market
According to feedback Glass’s receives, used market sales and demand continues to be buoyant. Much like the new market, January produced strong results but quietened down in February with fewer enquiries received.
Despite continued heavy discounting on new models, consumers are still attracted to used units. Even with the high discounts in place, consumers still see the used market as offering much higher value compared to new models as cost new prices have been continually rising. Many industry insiders believe it is these increases that continue to contribute to the new market’s difficulties.
UK Immigration
In February, the government launched a new immigration policy, which will come into force post-Brexit. There are concerns it could potentially severely damage a huge sector of the holiday home market. The new regulations will prevent ‘low skilled workers’ from gaining a visa.
Traditionally, UK farmers have sought overseas workers for piece work. Whilst many holiday home dealers have provided accommodation for the transient workforce. This has been an integral part of these dealers’ businesses. It is unclear who will take the place of the overseas workers and what volume of accommodation will be required for the farming industry in the near future.
Covid-19
It is fair to say that we are experiencing unprecedented times. At the time of writing, we still do not know how long Covid-19 will affect our industries and everyday life. Of course, any amount of time is unwelcome but hopefully any disruption will be kept to a minimum. The Glass’s Editorial team will continue to report any changes in the market ensuring that you are up to date with the latest news.