Due to the ongoing effects of the COVID-19 pandemic, demand, pricing and stock scarcity in the holiday home market have intensified. Staycation demand continues to bring record levels of sales and bookings for holiday parks. Although very positive, stock availability is under strain from increased demand. Glass’s industry contacts are labelling the stock issues a ‘crisis’ for the following reasons.
Reduction in rental de-fleets
The volume of available used stock has reduced, as parks are reluctant to sell-off their rental fleets during such an intensely busy period. Many parks are holding the stock for an additional year, as the units were under-utilised during the lockdown and do not currently warrant replacement. There are also issues sourcing replacement units due to production delays at manufacturing sites.
The price of used units has increased with the demand with dealers commenting that they are currently paying over Glass’s trade price to secure stock. In some cases, at unsustainable levels, where a limited profit margin remains.
Tighter health and safety regulations continue to impact the logistics of moving units from location to location whilst also increasing the shipping costs.
Despite the summer holidays being over and children returning to school, demand for staycations shows little sign of slowing. This renewed interest in holidaying in the UK has increased demand for holiday home holidays and an increase in first-time buyers. Many have never owned or rented a holiday home before, and have come to the market in numbers due to the continued uncertainty surrounding many overseas destinations requiring a 14-day quarantine period when returning to the UK.
There is good news for holidaymakers who want to make up for the time lost during the lockdown as the Government have given special dispensation for the season to be extended, this has enabled many parks to be booked up until the end of November.
Thankfully, most manufacturers have restarted 2021 model range production. For the manufacturers, recommencing production has been difficult due to physical contact protocols due to the pandemic. Additionally, many manufacturers are encountering problems with their supply chains. Delayed importation of raw materials from Europe is slowing production and, in some cases, leading manufacturers to reduce their overall production aspirations for 2021.
Glass’s understands that the first batch of 2021 stock will leave factories in November. Dealers and traders will hope that parks upgrading to this new stock will dispose of some of their rental fleets, although the main volume of 2021 model year stock will not arrive until early next year.
Despite some very positive news for the industry resulting from the knock-on effects of COVID-19, some park owners are experiencing increased instances of customers being in arrears on their site fees. This may be exacerbated when the furlough scheme ends in October, with some holiday homeowners reluctantly having to sell. There will be no shortage of buyers waiting to take their units, however.
There is the confidence that 2021 can deliver another strong year of sales. This would solidify the market’s buoyancy. Whilst this is dependent on the issues with stock not damaging the parks and dealers there is the underlying concern that the Brexit trade deal could add costs to the industry if the UK leaves the EU without a deal.
Glass’s believes that demand will remain strong into next summer, as it is unlikely that the pandemic is over, meaning that travel restrictions next summer are also very likely. Attracting so many new customers to the market this year has been very positive, however, to grow further, the industry needs to take this opportunity and focus on attracting more customers from younger age demographics. Future incentives from parks and competitive pricing will be key to growing ‘the staycation’ further, and ultimately a sustainable future for the holiday home market.