The Business Case for a Certificated Location Caravan Site

Many aspiring operators of Certificated Locations (CLs) ponder a crucial question before embarking on their journey: Will they see a return on their investment? 

Establishing a 5-van site certificated by the Caravan & Motorhome Club (CAMC) involves several variables, and the financial outcome is not set in stone. In this article, we delve into the key factors that will influence the viability of your CL in the long run. Your objectives may range from simply covering costs to creating a proper income stream. Each CL owner adopts a unique approach, and there is no one-size-fits-all solution.

Risk Tolerance and Investment

Your willingness to invest before realizing returns plays a pivotal role in the success of your CL. Consider your risk tolerance carefully. Are you prepared to make a significant upfront investment, or do you prefer a more gradual approach? This decision may shape the future of your CL.

Timeline

Determine your payback period – whether it's a swift return in 3 years, a moderate 5-year plan, or a longer-term 10-year vision. Your timeline will influence the scale of your initial investment and your financial expectations.

Financial Contributions and Contractors

Evaluate how much you can contribute personally, such as handling tasks like installing water pipes. Alternatively, you may need to hire contractors for certain aspects of site development, impacting your budget.

Demand throughout the Year

Understanding the seasonal demand in your area is critical. Assess how many visitors you can attract during the peak season and off-season periods. This knowledge will affect your revenue forecasts.

Marketing Efforts

Once your site is established, consider the time and skills you can dedicate to marketing your CL. Effective promotion can significantly impact your visitor numbers and income. Good photography can often be a key factor, so include this in your budget.

Site Location & Suitability

The location of your CL is arguably the most vital factor influencing demand and potential income. For instance, a site with sea views, proximity to a beach, dog-friendly facilities, and a nearby pub is likely to attract a steady stream of visitors, ensuring a quick return on investment. Conversely, a remote location with limited amenities might appeal to nature enthusiasts but could mean a longer return on investment timescale.

Start Small or Go All-In?

There are two primary approaches: starting small and gradually expanding, or going all-in from the beginning. Fully serviced pitches with amenities like Electric Hook Up, WiFi, and water & grey water on each pitch can generate higher nightly rates. However, this option usually involves a substantial upfront investment. Alternatively, you can begin with basic facilities and expand based on demand.

The Toilet Block Question

Many modern caravans and motorhomes come equipped with onboard facilities, reducing the need for a dedicated toilet block. Consider whether investing in a toilet block is necessary, accounting for costs and maintenance. If you don’t already have a toilet block, and feel you need one, consider the portable ‘container’ like solutions that can be relocated or sold if your plans change.

With the rise in popularity of campervans and the greater awareness of off-grid camping, what do you feel are the three key things for a site that wants to be 'off-grid' to consider when they are weighing up whether to open a site or not? Look at your area; are there any off-grid sites nearby, etc.? If so, what are they like and the price/night? Some like to pay little and are happy with long grass, but I think most enjoyed a clean, tidy, and well-mown site. If you are on the coast, you may demand a high off-grid price. Look at the approach to the CL; driving through a building site is not a selling point! Site security for the members, e.g., a minimum of a code-operated gate is important (as well as for you). For motorhome and campers, if you are open over the wetter months, a couple of hard standings will save a lot of damage to the grass.

Do you live on site? No I am approx 500m away in the village. Try to call in each day to say hello to new arrivals etc. 

Do you get many bookings in the winter months? Bookings certainly fall off when the weather gets colder but we find we can fill the hardstandings at weekends - we had our first member booked last year for Christmas and another one already booked in for Christmas this year.

How important do you feel an online booking system and marketing is to your success? I think online booking is very important as it will save you hours of work on the phone taking details down, etc. Has the potential to increase your bookings also. Marketing is also important, which I was slow to realize when starting out! Firstly, you need to get reviews on your CAMC listing (I did not push this at all!) but talking to visitors, this is their first port of call – no image, no review, won't even consider you. There are quite a few members that have told me they like to keep the sites they like to themselves. I then started to reply, "OK, but maybe if the sites you like to be quiet and don't get the footfall, they may not be there next year!" Then there is social media; it surely does help put you out there, but can be additional work - you will either love it or hate it.