During 2020/21, the caravan sector experienced a huge increase in sales due to the travel restrictions that were introduced during the Covid-19 pandemic, with an overall increase of 38% of sales during 2021. However, since 2023/34, the industry has faced an issue of overstocking as the demand for caravans and motorhomes declined due to pandemic restrictions being lifted. Yet despite this, with new trends and consumer behaviours on the horizon, the outlook for the sector looks more promising for the year ahead.
Brett Barton, Business Recovery and Restructuring Partner, discusses the recent changes in the sector and explores what the future holds for the industry.
Current overview of the industry
The UK caravan industry currently has around 2000 caravan parks which are home to thousands of static and touring units. Caravan and motorhome manufacturing contributes over £1.8 billion to the UK economy every year, with major UK caravan manufacturers like Bailey and Swift setting a high standard in design and innovation within the industry.
Caravan and motorhome boom during the Covid-19 pandemic
During 2020/21, the caravan and motorhome industry experienced a huge increase in demand as consumers were more inclined to holiday in the UK due to the travel restrictions that were imposed during the pandemic. Dealerships reported seeing orders during 2020 jump to a third higher than the previous year’s average. The Caravan and Motorhome Club experienced membership increases of 14% during 2020 which continued to increase into 2021, with roughly 4.5 million camping and caravanning for the first time during this period.
Post-pandemic issues arising in the sector
The supply chain was impacted during 2020/21 due to overseas restrictions, causing a supply chain crisis and leaving manufacturers with no materials and many caravan dealerships with no stock for extended periods of time.
This improved after the pandemic restrictions were lifted, yet many dealerships and manufacturers expected the demand for caravans and motorhomes to still be high, and therefore continued to produce and buy new models to be sold during 2022/23.
Unfortunately, due to a rise in costs, this demand decreased significantly. Since 2022, the average consumer has been impacted by higher interest rates, a period of high inflation and cost of living difficulties, which all contributed to the slowdown of caravan sales. Campsite pitch prices also increased and, on top of an increase in caravan and motorhome prices, caravanning can now cost almost as much as holidaying abroad.
Other significant changes to the industry
Aside from the pandemic, there have been other factors that have impacted the industry during the past 5 years. Some of these include:
- Slowdown of domestic tourism – following a large increase in consumers choosing to holiday in the UK during the pandemic, the rising of inflation rates and the general poor weather have turned holiday-makers away from domestic trips
- Increase in demand for facilities – a lot of consumers now expect facilities such as toilets, shower blocks and washing up facilities, which can only be found on campsites rather than inexpensive, off-grid fields
- Change in location preferences – in general, consumers prefer to be closer to facilities, attractions and places of interest, meaning remote fields or farms are less attractive
Over the past year, the industry saw some significant dealerships enter administration including Robinsons Caravans and Broad Lane Leisure, with several other smaller dealerships closing down entirely.
What does the industry look like going into 2025?
Going into 2025, it is the used caravan market that is demonstrating strength, with prices holding steady despite the economic pressures the UK continues to face. Consumers continue to seek staycations, with a buyer preference towards motorhomes demonstrated by the end of 2024, as motorhome registrations saw a 20.2% increase last year, showing a clear growing interest in self-contained travel.
New trends are also hitting the market, with eco-friendly and sustainable caravans in high demand, especially family-sized models. An increase in smart technology also being used in models indicates the industry is adapting to changing consumer needs, not declining.
While consumer wants and needs have changed, so have their spending habits. There has been an uptick in renting or ‘subscribing’ to a caravan rather than purchasing one outright. Fuelled by platforms such as Airbnb that prioritise convenience, affordability and flexibility for their consumers, renting caravans reflects a broader consumer mindset shifting towards accessibility over ownership. It is young people and families who are seeing the perks of a caravan without the financial burden that comes with owning one, and this marks a significant shift in the industry’s current economic model.
To see an example of our experts specialist assistance in this sector, take a look at our coverage of the assistance our business recovery and restructuring team gave to Ryedale Caravan and Leisure Limited in reviewing their financial position after a period of struggle. As a result of the experienced VAT team, led by VAT and Indirect Partner Gavin West, the implications of the VAT burden in the estate were also able to be minimised.
Get in touch with our experts
At PKF Smith Cooper, our team of experts understand the changing caravan and motorhome sector and can assist you in navigating the industry. Get in touch with us today to see how we can help you.
