The modern traveller | Opportunities facing UK Holiday Parks 1

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THE MODERN TRAVELLER | OPPORTUNITIES FACING UK HOLIDAY PARKS

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The modern traveller | Opportunities facing UK Holiday Parks 2

It is encouraging to see that since 2010, tourism has been the fastest growing sector in the UK in employment terms and Britain is forecast to have a tourism industry worth over £257 billion by 2025, with the holiday park and hospitality industry accounting for a large proportion of this growth.

Looking back at 2015, the holiday park industry showed steady improvement both in terms of the sale of parks and trading conditions on parks. In spite of a wet period during the peak weeks of the summer, a good spring and autumn in combination with low inflation, falling fuel prices and an increase in average earnings resulted in a good year for most holiday parks.

Due to their nature, holiday parks are often set in more remote locations of natural beauty where employment is lower than the national average, transport links and infrastructure are built around holidays rather than industry, therefore hospitality becomes more of a focus point to the local economy. Holiday park industry growth is vital in many communities to sustaining their local economy. Holiday parks contribute to the local community in terms of the volume of visitors they attract, the jobs they provide, the local businesses they support and the responsibility they have to protect and enhance the environment.

2016 looks set to be another year of growth with 7.3 million people holidaying in England in the first quarter - a 10% rise compared to the same period in 2015, according to VisitEngland. But, how will challenges such as Brexit and the rise in the national living wage affect the industry? And, how can holiday parks embrace opportunities such as changing customer behaviour and digital transformation in order to offset these challenges?

This white paper will look to highlight the factors facing the market moving forward and the opportunities available to progressive holiday park operators supported by technology.

THE IMPORTANCE OF HOLIDAY PARK GROWTH TO

THE ECONOMY

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External and internal factors look set to either provide growth, disrupt or at the very least affect the way holiday parks operate both with customers and employees.

1) The increase in popularity of the staycation

Park operators reported an increase in the popularity of the staycation. According to the Great Britain Tourism Survey, in 2015, British residents took 102.7 million overnight trips in England, totalling 300 million nights away from home, with an expenditure of £19.6 billion. The number of domestic trips was 11% higher than in 2014, and the amount spent increased by 8%, reaching an all-time high in nominal terms.

What factors have led to this increase?

Changes in holiday makers’ behaviour

Shorter, but more frequent stays are now becoming more popular. Consumers are looking to extend the benefits of their limited paid holidays from work – coupled with an increase in easy online bookings and the ability to be more flexible with planning and last minute breaks. Therefore the volume of local holidays has increased due to convenience. In 2016 research by QHotels, they found that “short breaks are now almost as popular as one-week or two-week holidays. Two thirds (66 per cent) booked at least one short break in the UK or Europe last year, while 68 per cent had a holiday of at least a week.” The same study showed an increase of 2% YOY of those taking a break in the UK; equating to 1 million people. QHotels commented on the changing trends: “The cost of going abroad, especially with sterling’s weakness, is obviously a factor, but it’s also becoming more important for people to relieve the stress of their busy working lives by having frequent long weekends away rather than saving up for one big trip a year.”

THE FACTORS WHICH ARE INFLUENCING THE HOLIDAY PARK MARKET

This increase in frequency has impacts on the operational side of the holiday park business; with the need to manage changeovers in a more efficient and streamlined manner. With wear and tear rates rising as a result, the need to keep on top of maintenance in a profitable way is imperative.

Safety fears with overseas travel for British holiday planners

According to BDRC Continental’s Holiday Trends survey in 2016, 77% of respondents said that safety is now a consideration when planning a holiday abroad. Edinburgh, Sydney and London were named as the top cities deemed most safe; “This group is also significantly less likely to plan on travelling abroad. Linked to safety, we can see a steady decline in intention to visit North Africa, and Paris is regarded as less safe than New York and Beijing. In line with ABTA data, traditional destinations remain the most popular overseas choices.”

This report’s findings of a more cautious UK holiday maker, twinned with a narrowing of considerations when shortlisting destinations and a higher propensity to use personal recommendations provides a great opportunity for the UK holiday park sector. However, this means that repeat business becomes more important in a focussed market, so the customer as advocate is of primary concern to park operators.

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2) Macro-economic factors

Whilst it has been highlighted that 2015 was a successful year for the holiday park sector there are various environmental changes which may now effect the growth of the industry moving forward.

Brexit – the good, the bad and the uncertain…

The results of the EU referendum in the UK will clearly have implications for the UK holiday park and caravan industry. However, given so much uncertainty and the fact that Leave negotiations with the EU are expected to be protracted, it is almost impossible to predict the exact and full nature of any threats and opportunities Brexit may bring at this early stage. However it is likely to impact:

• Standards and legislation. Possible savings might arise from any VAT changes but are these negated by the threat of loss of revenue and higher labour costs? The UK government will need to create new travel legislations in line with EU regulation that protect consumer rights

• Inbound and outbound tourism. According to 2016 Deloitte/ABTA research, 76% of UK holidays abroad are in EU countries (29.3 million in 2014), whilst 63% of inbound visitors are from EU countries (8.8 million in 2014)

• New trade deals within and outside EU for exporting and importing within the supply chain; from the build and materials of the venues themselves through to the consumables being used on a daily basis

• The supply of labour from the EU in the hospitality and tourism sector. A survey by People 1st, highlights “hard-to-fill” vacancies, where transient and low-skilled workers are required due to pay and hours requirements – “self-catering accommodation” accounts for 49% of these vacancies

The factors which are influencing the holiday park market

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2) Macro-economic factors

The cost of holidaying abroad (predicted to now cost the average family of four £245 more than they did prior to the vote, due to the fall in the value of the pound)

Britain’s holiday resorts are expecting a bumper summer with millions more UK tourists opting to holiday at home, and overseas tourists being lured to the UK by the favourable exchange rate post-Brexit. The rapid increase in the cost of holidaying abroad is likely to lead to a further 5% of British people, or 2.5 million choosing to holiday at home this year. The boost to domestic tourism follows a record-breaking first quarter. Sandra Matthews-Marsh, chief executive of VisitKent highlights why, “The nearest benchmark we have is the financial crisis of 2008, when there was a boost in staycations. I anticipate the same thing happening [this time]…We are beginning to see an uplift in people staying at home and putting off big spending decisions, including big holidays [abroad].”

Despite the possible post-Brexit boom in staycations and inbound tourism, there is concern that some Europeans may feel uncomfortable visiting the UK in the wake of Brexit and the negative messaging around the campaign. In response, VisitBritain is boosting its efforts in Summer 2016 to target European audiences via their local media.

Rise in the national living wage

According to the Low Pay Commission Report Spring 2016, in 2015, hospitality had the largest number of minimum wage jobs at 353,000 (24.6% of workers in the sector) rising to 447,000 in 2016 (31.1% of workers in the sector), second only to the retail sector. The hospitality sector now faces the challenge of how to react to the rise in the national living wage to maintain their profitability and competitive edge with wage bills predicted rise of £450m by 2020. Becoming more lean in terms of cost centres is the first port of call for many organisations; such as job cuts, shift pattern changes (hours cuts), procurement practices and skills reviews. All of this must be done in a competitive market where customer experience has to remain a priority.

The factors which are influencing the holiday park market

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The factors which are influencing the holiday park market

3) Holiday park sites linked with the housing market

With the model of mixed occupancy (holiday makers and home owners); this sector follows the fluctuations in the residential housing market closely and the related upturn reflects positively on the demand for this popular form of housing lifestyle.

Dean Westmoreland, Group Chief Executive of Omar Group Ltd, one of the UK’s leading companies in the park home market states, “The park home market is inextricably linked to the bricks and mortar property market,” Westmoreland continues. “It is strongest in the south of England, buoyed by higher property prices.” He explains: “The park home market has only really come back to life in the past year as property prices have risen back to their 2007 levels. The park home market fell off in 2008/9 as UK property prices fell circa 15 per cent. It has subsequently recovered but is still only at 65 per cent of its pre-recessionary levels in 2015. The current park home market is estimated to be worth circa £100m.”

Aging population looking for affordable housing

According to Edwards and Partners Market Report 2016, “The most significant improvement (in 2015) is in the residential sector where park home estates have been in strong demand, despite the extra workload imposed by the new regulations flowing from the 2013 Mobile Homes Act.”

The report continues to highlight the reasons for this increase; new regulations which were seen to affect the industry have now begun to “bed in” with operators now grasping new procedures and the sale of new homes has increased in turn, increasing the demand for vacant pitches.

According to the latest Government figures (January 2016), an estimated 85,000 households live in park homes, on 2,000 sites in England. The many benefits of park home living make for an attractive housing option for retired people.

Alicia Dunne, Deputy Director General of the National Caravan Council believes that as the UK faces an ever-aging population, the park home sector is in an increasingly strong position, improvements in accommodation quality and the comprehensive product offering will increasingly make park home living a smart housing option. “The sector is boosted by technical advantages in construction methods and by its greener credentials and improved energy efficiency provisions,” Dunne comments. “With the changing demographics in the UK, demand for this type of flexible and affordable accommodation is likely to increase. With this in mind, changes to planning laws would help the industry to fulfil its potential, and play its full part in solving the country’s current housing shortage.”

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Changing demographics – millennials and the holiday park industry

Many holiday park operators are looking to engage with a new customer demographic, the millennials, but not only are millennials a new target customer they are also the future dominating work force…

Every year brings new digital predictions and trends about what to watch out for over the coming 12 months. Digital currency. Wearable tech. The Internet of Things. The “high-tech” is now mainstream as millennials drive cultural change.

By 2020, millennials will form 50% of the global workforce. What does this mean for holiday parks? With this trend comes changes in employee mind-sets, workforces expect different levels of engagement, as teams and customers expect different ways of interacting. Companies who embrace this change at the frontline will reap the benefits. Millennials’ use of digital tools and their affinity with technology means they expect instant access to information, anywhere, anytime.

In the UK Holiday Planning and Booking Trend Report 2016 by Mediahawk “60% of respondents said they engaged with up to eight marketing touchpoints, including paid search ads, holiday brochures, brand website, travel review sites and social media.” Holiday park operators need to link up these touch points to provide consistent experiences and get a full overview of customer contact including historical data. It is imperative throughout the customer journey that their experience feels personalised, relevant and consistent; no matter who they are talking to or what channel they are accessing you via.

DIGITAL DISRUPTION AND THE CUSTOMER JOURNEY

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Digital disruption and the customer journey

The increase in online bookings providing flexibility for customers and operators

Over three-quarters of trips where a firm booking is made were booked online in 2015 and the volume of trips booked online has more than doubled since 2006. In 2010, Centre Parcs reported that over 70% of its bookings are made online.

These statistics highlight a growing trend, and holiday park operators must respond with an intuitive online offering. Online booking solutions, which ParkVision by Prodware integrate with, provide an optimum customer online experience and allow users to easily and effectively manage their online bookings.

Mobile search and booking

Although most research is done on a desktop, according to VisitBritain, mobile devices are used at some point by 25% of bookers; highlighting the importance of having information easily accessible from all devices.

Companies that are already delivering great booking experiences are now turning their attention to easier booking on any device, deeper insight into customer context, flexible customer preference management, and extended involvement in the customer’s trip.

Mediahawk state that “Purchases via mobile will account for 40% of sales in 2019. Our survey revealed that almost one-third of respondents used a tablet or mobile device to book their trips.”

In 2016, consumers are coming to expect every brand experience to be convenient, personalised and immersive. These expectations are no different when consumers plan or buy travel. Statistics from the Association of British Travel Agents (ABTA) illustrate the recent shift in travel consumers’ researching and buying behaviours — particularly those of millennials.

Social media influencing buyer behaviour

Nearly one third of all Britons are in some way influenced by social media in their holiday decision making, the BDRC Continental Holiday Trends report claims. Social media is a channel that is fast growing but one where many holiday parks often fail to capitalise on the true potential of using it as a selling and service tool that integrates with other activities.

Darryl Hall, Online Marketing Manager, Park Resorts, highlights how they use digital media in their marketing campaigns, “User generated content is becoming increasingly useful in a Digital Marketer’s toolkit. Nowadays holidaymakers make purchasing decisions based on social media and travel review sites. They are looking for authentic stories, reviews and content to ensure they are making the right choice when booking a holiday. Giving our customers a platform to share their amazing holiday memories helps future guests when deciding whether our parks are right for them.”

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CHOOSING FUTURE PROOF TECHNOLOGY TO SUPPORT GROWTH IN A CHANGING SECTOR

The question for holiday park operators is how to best capitalise on these opportunities in order to progress in a changing and challenging market. The customer experience spans pre-stay, on-site and follow up. Operators need to provide a joined up, competitive and of course, positive offering.

At a Microsoft Convergence event in 2015, attendees heard about the digital traveller and how hospitality companies must transform travel via customer experience, connected operations and an empowered workforce. Spanning those three elements, the next “big bets” discussed in the travel industry include predictive maintenance, room automation, modern PoS, self-service, demand analytics and operational productivity.

Marketing, comparison and booking

Tools such as Microsoft Dynamics 365 for Sales can help manage and facilitate multi-channel marketing techniques. CRM capabilities can support operators in mapping and responding to the entire customer journey – from comparison, to enquiry, to booking, to holiday and to referral and repeat stays.

Maximising revenue streams

As standards are changing and customers’ needs are becoming complex and demanding; high-end and more value-based offerings are now a normal expectation: luxury and comfort are becoming the key drivers of the market. As more and more customers are looking for unique experiences and with the rise in online bookings leading to more choice and flexibility, holiday parks must ensure that all areas of their business such as cafes, on-site services and leisure facilities fulfil customer expectations. In this highly competitive and dynamic industry the key to success is to maximise the primary and secondary revenue streams from both new and existing customers, whilst keeping a watchful eye on operational and transactional costs.

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On site efficiencies and a personalised experience

The ParkVision solution from Prodware based on Microsoft Dynamics NAV, incorporates all the holiday park core business functionality into one single solution that supports optimised processes and delivers access to information to the whole organisation. This time critical information allows departmental managers and stakeholders to make effective and efficient business decisions that increase overall business performance.

ParkVision has been developed to fall in line with Microsoft Dynamics releases and seamlessly operates within the familiar Microsoft stack of technology.

As primarily a service organisation, often a holiday park’s greatest asset are their people. As such staff engagement, support, collaboration and empowerment should be at the forefront of management priorities. Collaboration tools such as Office 365 Groups including Yammer, Outlook and Skype for Business, facilitate communication, adapting to how your millennials naturally want to interact. Particularly if you are operating with a leaner workforce, you must support them with the tools they need in order to become more productive and collaborative.

Mobility is a must for all parks

By 2020, according to GSMA, there will be an additional 880 million unique mobile subscribers – accounting for 56% of the global population, using over 25 billion devices. With the increase in use of the mobile device for both consumers and business, the hospitality industry sees the mobile connectivity offering as an essential service rather than an add-on. Park operators need to ensure customer loyalty and optimise revenue per guest, mobility can support this objective.

The modern traveller has come to expect complimentary Wi-Fi across the entire travel experience — in airports and other hubs, whilst travelling, and most importantly, in their lodgings. 49% of holidaymakers put wi-fi as their first priority when shortlisting. Having complimentary wi-fi means a park is more competitive, can collect login data for future campaigns and can improve ratings on visitor feedback sites.

For holiday park operators in more rural locations, wireless infrastructure can be a headache; but parks are competing for share of wallet with hotels, particularly in the luxury end of the sector.

Parks will be looking to improve productivity and communication by allowing employees and contractors to securely share the wireless infrastructure from mobile devices. If park operators need to improve their maintenance and changeover efficiencies, mobility will enable this live processing scenario.

Wireless technology solutions can offer park operators high speed and robust connectivity in challenging environments that allow customers to access their daily lives or be entertained; for colleagues and suppliers to work more efficiently but also for operators to work from a fit-for-purpose framework that allows an increase in cross-sell and up-sell via the use of mobile apps.

Choosing future proof technology to support growth in a changing sector

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Choosing future proof technology to support growth in a changing sector

The provision of personalised, premium services via mobile apps feeds into the way millennials behave and interact. Park operators can create their own app – containing details on entertainment schedules, real-time promotions, self-service booking and check-out facilities and feedback loops. This allows the holidaymaker to plan their own personalised experience on their mobile device or Smart TV in their room. The park operator can then capture this information in order to understand trends and tailor future offerings and experiences.

The creation of apps is now more accessible with technology such as Microsoft PowerApps. Depending on in-house resource, operators or their tech partners such as Prodware, can work from drag and drop templates to develop a user friendly solution for their customers.

According to Microsoft when discussing their “Connected Room” on Windows 10 technology concept, it takes on average 12 minutes for a traveller to set up their room on arrival (lights, temperature, TV, navigating amenities). If park operators could also offer this concept to their customers, not only will they improve and personalise the on-site experience; but it will also make cross and up-sell that much easier.

Pre and post stay

How do you know you are doing a good job, and therefore be safe in the knowledge of replicating your approach in future or across different markets or sites? It is important that you provide a relevant feedback loop for your customers – better that they give you their opinion so that you can react, rather than to a competitor or via an online forum.

A social listening tool like Social Engagement within Dynamics 365 scours social networks like Facebook and Twitter to help you spot emerging trends in people’s comments, respond to service issues before they escalate, track marketing campaigns, gain insights about your competitors, and more.

Given the amount of data that is available to park operators throughout the entire experience from enquiry through to feedback, the power comes in the analysis in order to make strategic decisions on your park’s direction as well as to provide the best customer experiences. Business intelligence is moving forward in a more accessible way, with the advent of “modern BI” – with analytics tools embedded in apps, such as Power BI and Cortana Intelligence. Users do not have to navigate away from their Dynamics 365 or NAV solution in order to make use of these BI tools.

On-site maintenance becomes more automated and efficient with the use of predictive technology such as Azure Machine Learning. Parks can move into a more pre-emptive model, reacting less to customer complaints about faulty infrastructure if these components are monitored, serviced and fixed in advance.

A Microsoft Gold Partner, Prodware specialises in the implementation, integration and maintenance of sector specific ERP and CRM business management solutions based on Microsoft Dynamics. With over 25 years industry experience Prodware can match the relevant business management solution to your needs. To find out more, contact us and keep updated with our holiday park blogs.

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