Following a $405 million revenue drop this calendar year to date, patchy green shoots are starting to emerge in Australia’s holiday park sector

New data from business advisory firm BDO, in partnership with the Caravan Industry Association of Australia, shows Australia’s holiday park sector has experienced a nation-wide 33% revenue drop (around $405 million) so far this calendar year (to the end of July).

The Easter long weekend – traditionally the busiest weekend for holiday parks across the country – saw revenue drop by 91% nationally when parks were forced to close or limit trading due to the national COVID-19 lockdown

“There’s no doubt that the first half of 2020 has seen some of the biggest impacts ever felt by the holiday park sector in Australia, starting with the bushfires in New South Wales, Victoria and Kangaroo Island, followed by the COVID-19 pandemic. Easter 2020 was a write-off for parks in every sense of the word,” said Angus Strachan, BDO Director of Business Services.

Queensland has been the most impacted state so far, with revenue down 38% (around $104 million) compared to this time last year. While other states saw an increase in revenue over the July school holiday period, this was not the case in Queensland due to border closures and a general reluctance of grey nomads to travel north during winter in the numbers the state has become accustomed because of the pandemic. Some Queensland holiday parks experienced revenue drops of up to 50% on last year’s July school holidays, with powered sites being the heaviest hit – down 69% year on year.

However, as a whole, the state is on track to match last year’s nightly bookings due to a healthy number of forward bookings for the September school holidays.

“Given recent announcements regarding border closures, this will have to be monitored carefully by businesses in the sector – particularly those further south carrying unprecedented levels of customer credits (forward payments) from the bushfires and COVID lockdowns,” Angus said.

New South Wales has experienced a revenue drop of 33% (around $132 million) this year to date but there are green shoots on the horizon. The state recently recorded two consecutive months of revenue growth in June (9.4%) and July (13.2%) compared with last year, off the back of the state’s lowest point in May where revenue had fallen by a total of 42% compared with the first five months of 2019.

Going into August, Victoria’s revenue is down 31% (around $66 million) compared with last year, having hit a low point of 35% in May. Due to current Stage 4 restrictions, the September school holidays do not offer hope for the sector, with forward bookings down 63% compared with 2019.

South Australia also hit a low point in May when revenue dropped by 33% (around $28 million) year to date compared with the previous year. While the state’s performance has largely stabilised since May, it is yet to record a calendar month where revenue exceeded last year since the pandemic started. Looking forward to the September school holidays, forward bookings in South Australia are improving but continue to trail last year by around 17%.

“The market in South Australia is very patchy – if you’re a destination tourist park located within about 3 hours’ drive of the city, you’re probably seeing booking rates increase and you possibly had a very strong July. But if you’re a park located further away, such as further inland, you may be yet to experience a significant rebound since May’s low-point,” Angus said.

While holiday parks in Western Australia and Tasmania have been the least impacted so far this year, they have still experienced revenue drops of 22% (around $35 million) and 19% (around $6 million) respectively. These states joined New South Wales in the July school holiday period to exceed last year’s takings for the first time since the pandemic started.

The new data shows the 2020 July school holiday period was worth $56 million to the sector nationally, compared to around $69 million in 2019.

“The stronger-than-average performance we have seen in New South Wales, Southern Western Australia and Tasmania during the traditionally quieter months of June and July has demonstrated the resilience of the tourist park sector and its product offering – which is one that is loved by Australians, myself included,” Angus said.

While the pain was evenly felt in March, April and May across the country, and hit all the different tourist accommodation categories (cabins, powered and unpowered camping sites), it was the unpowered camping sites that virtually stopped receiving bookings all together.

Cabin bookings, on the other hand, are seeing an upwards trend in Western Australia and New South Wales. During Western Australia’s July school holiday period, cabin bookings were up around 45% and the average stay was up on the same period last year (2.8 nights up from 2.3 nights last year). The New South Wales July school holiday period saw cabin bookings increase by 25%. For the upcoming September school holidays, some Western Australian parks are seeing cabin bookings up as high as 90%.

The September school holiday period is providing brighter news for most states with bookings on track to meet last year’s performance – that is, everywhere except Victoria where people are not making plans due to Stage 4 restrictions.

Forward bookings for powered sites over the September school holidays are on track in New South Wales and Queensland to meet last year’s total bookings.

“Despite the green shoots emerging in some states, we still have a long way to go until the industry returns to the same level of activity seen in 2019. On the customer side, a big part of this comes down to the missing grey nomads and international tourists who usually visit Australia’s holiday parks year-round. On the business side, credit is becoming more difficult and time-consuming to come by and transactional activity has stalled,” Angus said.

“With the closure of our international borders likely to continue, domestic tourism will be key to driving the industry’s recovery and building confidence in business owners of one of the hardest hit industries to push through the pandemic,” he said.

The new data shows that 36% of bookings during July were people holidaying in their own state – which is up from 23% during July last year.

“With border control measures in place across the country, we anticipate this figure to rise over the coming months, particularly into the September school holidays and Christmas, where (excluding Victoria) forward booking rates are looking the best they’ve been for any holiday period so far this year.”

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