Rating Manual section 6 part 3: valuation of all property classes

Section 490: holiday centres

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1. Co-ordination

Holiday Centres are subject to co-ordination for the current rating list as outlined in the relevant Practice Note.

2. Description

The holiday centres referred to in this instruction comprise permanent buildings providing sleeping accommodation varying from individual wooden chalets to brick built, self contained family suites. In addition there will be cafeterias, restaurants, bars, shopping centres and a very full range of leisure and entertainment facilities, the whole situated in attractively laid out grounds.

In such surroundings many holiday-makers may not wish to leave the precincts during their stay and non-resident visitors will be attracted to the centre on a daily basis.

Originally holiday centres catered for guests on inclusive tariffs but today many centres offer a “one meal” (ie breakfast) tariff or alternatively a self catering flatlet or suite.

Since the 1980s there has been a marked move away from the “Hi-de-hi” type of holiday “camp”. The change from “camp” to “centre” is but one example of the attempt by the industry both to move up-market and to diversify. The most noteworthy example is the development of Centre Parcs. The Sherwood Forest Centre, for example, includes luxury villas, a bowling alley, sports centre, a dome offering “a palm-fringed paradise with endless possibilities for fun and relaxation in and out of the water of a constant temperature of 84°F”, and a church.

At some holiday centres, however, the owners have demolished terraced chalets and replaced them with standard caravans, increasing the availability of self-catering accommodation. Only a narrow borderline exists between holiday centres where guests (either all or some) stay in caravans, and the normal (Rating (Caravan Sites) Act) type of leisure caravan park.

There are also a number of hotels effectively run as holiday centres. The best example of these are those hotels operated by Warners. These are often in former mansions, set in their own grounds, and available only as part of a holiday package. The Warners hotels are for adults only, and aim at attracting older guests.

3. Method of Valuation

There is no known useful rental evidence in respect of holiday centres. 1990 List valuations of holiday centres were agreed on the contractor’s basis.

For the 1995 compiled list holiday centres were also valued on the contractor’s basis. However, following lengthy discussions with the agents acting for the major holiday centre operators, and the provision of full accounts, it was agreed that the correct approach was to adopt the receipts and expenditure (R&E) method.

Full details of the R&E method are set out in Rating Manual: section 4 part 2. In carrying out a R&E valuation on a holiday centre special care needs to be taken to reflect the differences between chain operated centres (such as Butlins, Centre Parcs, Warners, Pontins etc) which have high central marketing and advertising costs and commensurate higher turnovers, and independently run holiday centres which may not achieve the same level of turnover but also will not carry the same level of overheads.

Where full accounts are not available, holiday centres should be valued on a percentage of receipts, the percentage drawn from the range produced by analysis of valuations where full R&E valuations have been undertaken. Care must be taken to reflect factors which would influence relative profitability, and to reflect the different receipts and costs profile of chain operated and independent centres (as referred to above).

As a check, the resultant valuation should be analysed on a price per chalet/apartment and a price per bed-space approach, although care is required when undertaking such a ‘stand back and look’ as the range of additional facilities may vary significantly between different centres.