Budget-conscious holidaymakers drive big rise in caravan park revenue

The Easter holidays were also lucrative for holiday park owners as average revenue increased 9 per cent to $56,000 compared with the prior year, while occupancy rates were steady at 76 per cent.

“The latest data suggests that holiday parks remain a very attractive option particularly as household budgets are tested,” BDO business services partner Angus Strachan said.

Bushfires in late 2019 and early 2020 – and then the pandemic lockdowns – smashed holiday park revenues but they enjoyed a resurgence in 2022 as large numbers of people tried camping and caravanning for the first time while overseas travel was unavailable.

It was clear that many Australians enjoyed what they had experienced and were returning for more of these types of holidays, Mr Strachan said.

Total summer revenue lifted 3.7 per cent to just under $900 million nationally with all states apart from Queensland booking increases. NSW remains by far the biggest caravan and holiday park market with revenues over summer of $328 million, a rise of 4.1 per cent year-on-year followed by Queensland ($158.4 million) and Victoria ($151.8 million).

The increase in revenue was down to rising costs and inflationary pressures, as well as greater demand, with more parks adopting dynamic pricing models.

While a 49 per cent occupancy rate might appear low when compared with hotels and resorts, where rates of 80 per cent and above are considered strong, Mr Strachan said holiday park occupancy levels were skewed because unpowered sites, which could accommodate thousands of people with very few overheads, drove down the average.

“To put things into context, in Easter, occupancy for cabins was 81.6 per cent, powered sites [occupancy] was 83.2 per cent, and unpowered sites 58.3 per cent,” Mr Strachan said.

Over summer, occupancy was 69.5 per cent for cabins, 56.8 per cent for powered sites, and 19.4 per cent for unpowered sites.

The strength of the holiday park sector makes it an increasing target for corporate players. A holiday park near Hastings Point on the NSW Tweed Coast set a record when it sold for $50 million in March to private equity-backed operator Tasman Holiday Parks.

The country’s biggest holiday park owner and operator, G’Day Group, which includes the Discovery Parks network and is majority-owned by Australian Retirement Trust, has amassed well over $1 billion of assets, while Tasman Holiday Parks has built a $500 million-plus portfolio in just a few years.

The latest quarterly update from the Caravan Industry Association of Australia showed that despite rising outbound international travel numbers in the key Baby Boomer market – the “grey nomads” who drive the holiday park sector – there were 15.2 million overnight caravan and camping trips taken in 2023, a small increase on the previous year and 9 per cent higher than 2019, before the pandemic.

Caravan Industry Association chief executive Stuart Lamont said holiday parks remained a strong “value-for-money proposition for families … with quality offerings across all price points [and] particularly as household budgets are tested”.

Mr Lamont said he did not anticipate a shift later this year in the strong demand for holiday park accommodation over summer and Easter.

“As an industry we are still very happy to see that Australians still love visiting their country, hitting the road and enjoying their favourite regional and rural spots,” he said.

Mr Strachan said product diversification, recent investment in facilities accelerated by tax incentives and activities provided by park managers and owners were helping to increase the popularity of holiday parks.