UK holiday parks: Watch points for operators and lenders

The UK holiday park sector has had a good summer. Holiday centre and park participation rose from 23% in 2025 to 26% in 2026, as warm weather, geopolitical uncertainty, concerns over flight disruption, higher airfares and EU border delays kept holidaymakers closer to home.

Investor appetite in the sector is also returning. Trading conditions and pitch values have stabilised from the sharp cost-of-living squeeze of 2023–25. Deal volumes doubled in 2025, and in September 2026 an Aermont Capital affiliate completed the acquisition of Park Holidays from Sun Communities.

However, there are pockets of stress across the sector. Margins are thinner, balance sheets for some operators remain under pressure and legal and reputational exposure in the ownership model is rising. A run of administrations since May 2025, most recently in September 2026, shows how quickly an over-leveraged operator can come under stress.

Letting and ownership: Different pressures

Most parks earn from two revenue streams: short-stay letting and holiday-home ownership. The pressures on each differ. 

Short-stay letting

• Industry revenue is forecast to be broadly flat (-0.1%) in 2026-27, following a compound annual decline of around 1.7% over the preceding five years
• Rising costs are impacting margins. The National Living Wage rose to £12.71 in April 2026 for those aged 21 and over, on top of earlier National Insurance increases. Labour-intensive, seasonal businesses such as holiday parks are disproportionately impacted
• Several major brands are discounting 2026 breaks more heavily than 2025 to hold occupancy. That protects volume but erodes margin
• The gap between well-located, well-capitalised parks and higher-debt or legacy sites is widening.

Holiday-home ownership

• Recurring pitch fee income is the main strength of the ownership model, but it is also its main exposure. Owners are taking longer to pay pitch fees, putting pressure on operator liquidity
• Cheaper units are selling while higher-value stock is not, which ties up working capital Manufacturers and suppliers report the same pattern
• Pitch values have stabilised. Savills puts holiday statics at around £32,190 and residential pitches recovering to around £40,547
• Publicity around caravan resale values is still deterring buyers and group litigation from the Holiday Park Action Group remains unresolved.

The Holiday Park Action Group claims

The most consequential development for the ownership segment is the group litigation brought by the Holiday Park Action Group, a consumer campaign body founded by Carole Keeble following BBC Panorama coverage of the sector.

• Around 2,000 holiday-home owners who bought using a loan or finance agreement are seeking compensation, on a no win, no fee basis
• The High Court is asked to decide whether annual pitch fee escalation clauses are fair and enforceable, and whether operators should have disclosed that caravans lose most of their value within a few years
• Cited examples include a pitch fee rising from £2,795 to £4,100 in two years, around 46%, and a caravan bought for £29,995 reselling for £5,000
• Counsel for the claimants described the sector as essentially unregulated, with no statutory rules governing operator conduct beyond general consumer protection law enforced by the Competition and Markets Authority.

The claims are proceeding as test cases on a small number of identified sites, intended to produce a ruling that can be applied across the wider group. They remain at an early stage, and no timetable, hearing date or trial date is publicly available.

A finding for the claimants could accelerate statutory regulation of pitch fee reviews and sales disclosure. That would be a structural change to how the ownership segment prices, with knock-on effects on covenant headroom and for any valuation that assumes units held for sale carry their book value.

What recent insolvencies show

Since May 2025, there has been a cluster of administrations in the sector. Common themes include:

• Revenue decline outpacing cost control
• Thin headroom going into the low season, with a weaker main season no longer covering the shortfall
• In more than one case, a secured lender declining further support triggered the formal process.

None of these cases turns on the Holiday Park Action Group litigation. But an operator already short of headroom has little capacity to absorb a further reputational or compensation shock.

Grant Thornton UK Advisory & Tax LLP acted as joint administrator on Celtic Holiday Parks and, in 2023, on Royale Resorts.

What should operators and lenders do now?

For operators

• Autumn is when most parks set 2027 pitch fees, issue invoices and plan cash flow. Fee rises should reflect cost inflation and planned investment, supported by evidence such as facilities, service levels and local market rates
• Most parks invoice annually. Splitting pitch fees across the year smooths receipts and reduces the pressure on customers, but it means the park must hold enough cash to fund operating costs and capital commitments until later payments arrive. Model both approaches in the cash flow forecast
• Review arrears by customer, age and amount before setting terms. Unpaid 2026 fees show how much cash is tied up as debt and how likely customers are to pay on time next year
• Review pitch fee escalation clauses and point-of-sale documentation ahead of any High Court ruling. Weak documentation puts at risk not only compensation but the pricing model itself
• Reduce reliance on peak-season demand through glamping, longer lets and year-round attractions
• Stress-test cash flow and covenant headroom against year-round trading, not peak season.

For lenders

• Operators weighted towards caravan sales and pitch fee income carry more risk from any High Court ruling than those weighted towards short-stay letting. Understand each borrower's revenue split
• Revisit valuation assumptions where units held for sale form part of the security package.
• Watch key indicators: rising pitch fee arrears, slow-moving high-value stock and discounting to hold occupancy
• Weigh flood and coastal erosion exposure as carefully as trading performance and leverage covenants. Medmerry, closed permanently after the 2024 flooding, shows what that risk can mean for a site
• Engage early. In the recent cases, formal insolvency followed a declined request for further support.  

How we can help

Our restructuring team works across this sector with operators, owners, investors and lenders, from early cash flow and covenant reviews through to formal appointments.

• Independent business reviews and short-term cash flow analysis, giving management and lenders an objective view of headroom
• Debt advisory, including lender negotiations, covenant resets and refinancing options.
• Restructuring options analysis, including company voluntary arrangements, restructuring plans and administration
• Accelerated M&A and going-concern sale processes
• A confidential, no-obligation conversation about a specific situation.

For more information or advice, contact Chris Petts or Shane Smith.