Camping, a real estate investment like no other
Batirama.com 08/26/20190
In France, the camping market is doing well and, given the trends, the phenomenon is here to stay.
While many campsite owners are retiring, many sites are looking for buyers. However, campsites are experiencing a major change in their economic model, characterized by a move upmarket in services, and increased interest from large investors. So many elements to take into account before investing in this property like no other.
Did you know that France is the leading campsite in Europe, and the second in the world behind the United States, with 8,000 campsites? Camping in France is particularly appealing to foreign tourists. In 2016, according to INSEE, these were mainly Dutch, Germans, British and Belgians. As for the French, they represent 68% of all campsite customers.
The number of campsites in France does not seem about to slow down. Between 2008 and 2018, it increased by 20% and, over the past two years, we have seen an acceleration. Thus, in 2018, the sector garnered 125 million overnight stays, an increase of 0.8% compared to 2017 (i.e. one million additional overnight stays). A success due to the increase in German and British customers, mainly.
Camping: strong progress in the west
Campsites in coastal areas concentrate most of the visitors: more than half of overnight stays are recorded there. The regions where people camp the most are Occitanie and Nouvelle-Aquitaine.
For some time now, we have been witnessing a shift towards the west. In 2017, the strongest increases took place on the Brittany and Normandy coasts. Between 2017 and 2018, overnight stays increased by 9.2% in Normandy, 8.9% in the Grand Est, 6% in Hauts-de-France, and 4.6% in Brittany, while they fell 3.3% in Provence-Alpes-Côte d'Azur. Heat wave effect perhaps helping, the movement towards the west and the areas with milder weather seemed to be confirmed in the summer of 2019.
Camping: a market that is doing well
The figures prove it: the camping market in France is doing well. Twenty years ago, it generated 800 million euros per year. Today, it has reached 2.5 billion euros. According to an article published in Challenges magazine (December 14, 2018), some campsites make a gross margin of more than 90%, and their profitability can reach 20% with a turnover that increases by 4 to 5% per year. The average length of stay for outdoor accommodation customers is the longest among all types of collective tourist accommodation (5.13 days in 2017).
A majority of independent campsites
The campsite market in France is largely dominated by independents. They predominate at almost 90%. Less than 10% of the campsites are branded, integrated into chains or franchises. According to the magazine L'Officiel des terrains de camping, less than an eighth of the French park had a sign at the beginning of 2018, i.e. 1,075 units. Private management predominates: 75% of campsites are under private management, 22% under public management, and 2.5% under association management.
The campsites are divided into several categories: very small campsites have 7 to 60 places, small campsites have less than 100 places, medium-sized campsites between 100 and 200 places and large campsites a little over 300 places (there are just under 450). Two-thirds of campsites have less than 100 places. For some time now, we have been witnessing upheavals in the landscape of French campsites: many small campsites are disappearing, in particular municipal campsites, which are too expensive for municipalities to maintain, and too confidential to interest large investors.
In this context, the National Federation of Outdoor Hotels (FNHPA) has launched an inventory throughout France in order to avoid closures of campsites by communities. Moreover, while their owners are reaching retirement age, some are unable to find buyers. At the same time, investment funds have begun to buy campsites to modernize them and upgrade them.
French campsites bought by investment funds
Among these large investment funds interested in French campsites, we find Vacanselect (bought by Vacalians, known under its consumer brand Tohapi) which now has more than 33,000 pitches under the brand name. It is thus getting closer to its main competitor, European Camping Group (Homair).
Other groups, such as the campsite operator Sandaya (11,500 pitches), are investing massively to expand their park. Their economic model: luxury camping, where part of the open-air hotel business would be made up of genuine holiday clubs. For them, this involves the generalization of mobile homes, the development of aquatic complexes, even spas, and new holiday clubs. The consequence of these changes is that services are becoming more expensive.
We are witnessing a move upmarket both in campsites (up to 4 and 5 star level) and in customers.
4 and 5 star campsites on the rise
Apart even from takeovers by investment funds, the emergence of 4 and 5 star campsites is general. In 2000, there were 700 4 and 5 star campsites. Today, there are 1,400. At the same time, the number of 2-star campsites has almost been halved, dropping from nearly 4,000 to 1,900. The development of services such as sports and leisure activities , childcare centers or shops, is general.
In 2017, 4- and 5-star campsites captured more than half of the number of visitors, although they represented 18% of the park, but 37% of the total number of pitches. This sector particularly attracts young families with children, as well as new customers. Dutch customers, historically fond of camping with tents or caravans, also appreciate this model of the holiday club.
The new trend: equipped pitches
The new trend? Pitches equipped with rental structures. This can be mobile homes of course, but also – in descending order – cabins, small chalets, canvas bungalows. They represent a third of the offer, for more than half of the turnover of campsites. Demand has evolved very quickly, and today a majority of French people prefer to rent accommodation at the campsite rather than a bare pitch: 61% say they prefer furnished rentals.
This is a major change in expectations, where 5 years ago the attraction for bare pitches still dominated. According to the National Federation of Outdoor Hotels (FNHPA), the French favor innovation: 60% want to try camping in unusual accommodation (yurt, caravan, tree house, transparent bubble, etc.).
Another trendy model: ecological campsites
Alternatives remain, however. Traditional camping still has its followers, and the large complexes are far from unanimous. As eco-tourism gains momentum, ecological campsites are increasingly in demand.
This may involve setting up compost to reduce waste, or developing renewable energies. Labels are available, such as the European Ecolabel, represented by a flower, which rewards the campsite for its actions in the field of the environment. Good to know: ecological campsites can represent a high investment, but aid is possible.
At the same time, other initiatives are emerging. VVF Villages is currently developing an economical camping model in light accommodation. It is aiming for a thousand locations by 2021.
Investing in a campsite: under what conditions
Today, a whole generation of campsite operators is approaching retirement. In 20 years, nearly 1,000 campsites have disappeared, including municipal campsites. This represents 50,000 locations. For lack of buyers within the family, many owners put their campsites up for sale. For those who wish to start operating a campsite, the takeover is much simpler than the creation of a new establishment.
Nowadays, it has become difficult to open new campsites on new locations, due to a lack of suitable sites, and because of new environmental regulations and town planning standards. This in particular on the coast. Consult this site to find a campsite for sale.
Namely: a quarter of the 8,000 French campsites are located in a risk zone. Located at the water's edge, many campsites can be prone to flooding and landslides.
Campsite owner: a job with many hats
Do you want to invest in a campsite? Know that managing a campsite is not easy. You will need to know how to put on multiple hats and manage many activities at the same time, such as accommodation, catering, the swimming pool, the slides, the purification, the commercial part, the works during the winter... Also plan to invest permanently (indoor swimming pool, slides, spas, saunas, etc.), also to bring you up to standard, finance rental accommodation, etc. It is estimated that, in a campsite, between 20 and 25% of turnover is devoted to investment.
The cost of a campsite varies greatly depending on its size, location and equipment. Those on the coast have higher prices.
Campsites in France: what future?
Today, many reflections are underway, and the FNHPA has set up, since 2018, three working groups.
The first relates to small campsites to be revitalized, the second to public-private partnerships, the third to sustainable development. An essential support so that French campsites continue to do well, regardless of positioning or category!
Source: batirama.com
