Holiday parks and coronavirus – the issues facing caravan park owners

08 April 2020
CARAVAN

 

Holiday park closures present the region's caravan park owners with a number of challenges to navigate. Here we've answered your most common concerns and queries


As the spread of COVID—19 intensified, on 24 March 2020, businesses providing holiday accommodation were advised to close their doors as quickly as possible. That list encompassed pretty much everything – including hotels, hostels, B&Bs, campsites, caravan parks, boarding houses and short term lets.

But what does that mean for the future of the caravan industry – and how will it affect this cornerstone of the region’s economy?

More importantly, how should you as a holiday park owner deal with the uncertainty?

We’ve collated our most common queries to help you navigate the impacts of coronavirus.

I employ numerous members of staff on full time, part time and seasonal contracts but now that the park is closed there is little or no work for them to do

Under normal circumstances, where there is a significant downturn in work, businesses would be seeking to either temporarily lay-off their staff or look to make redundancies. However, in the current landscape of Covid–19, the Government has introduced the Coronavirus Job Retention Scheme (CJRS), and with it the concept of ‘furloughing’ employees.

The scheme is open to all UK employers that had a PAYE scheme in place on 28 February 2020, and allows those businesses to claim back 80% of the wages (up to £2,500 per month) of employees who have been furloughed in response to the COVID–19 pandemic. There’s no obligation on the business to top up the 80% to the employee’s normal level of pay. This grant will be available for an initial period of three months, backdated to 1 March 2020, but it may be extended further. Employees need to have been employed on or before 28 February 2020 and furloughed for a minimum period of three weeks for the business to qualify for the reimbursement.

To be eligible under the CJRS, employers should write to the relevant employee confirming that they have been designated as furloughed and keep a record of this communication. Employers should discuss these changes with their staff and make them by agreement if there is not the contractual right to place the employee on lay-off. Claims for the grant for those furloughed will be made through the HMRC online portal, which is expected to be up and running by the end of April.

Further detailed guidance on the scheme has been produced by the Government. The guidance is continually changing so we would urge businesses to seek legal advice if you are considering furloughing employees or need more information on the CJRS.

I employ numerous members of staff on full time, part time and seasonal contracts but now that the park is closed there is little or no work for them to do

Under normal circumstances, where there is a significant downturn in work, businesses would be seeking to either temporarily lay-off their staff or look to make redundancies. However, in the current landscape of Covid–19, the Government has introduced the Coronavirus Job Retention Scheme (CJRS), and with it the concept of ‘furloughing’ employees.

The scheme is open to all UK employers that had a PAYE scheme in place on 28 February 2020, and allows those businesses to claim back 80% of the wages (up to £2,500 per month) of employees who have been furloughed in response to the COVID–19 pandemic. There’s no obligation on the business to top up the 80% to the employee’s normal level of pay. This grant will be available for an initial period of three months, backdated to 1 March 2020, but it may be extended further. Employees need to have been employed on or before 28 February 2020 and furloughed for a minimum period of three weeks for the business to qualify for the reimbursement.

To be eligible under the CJRS, employers should write to the relevant employee confirming that they have been designated as furloughed and keep a record of this communication. Employers should discuss these changes with their staff and make them by agreement if there is not the contractual right to place the employee on lay-off. Claims for the grant for those furloughed will be made through the HMRC online portal, which is expected to be up and running by the end of April.

Further detailed guidance on the scheme has been produced by the Government. The guidance is continually changing so we would urge businesses to seek legal advice if you are considering furloughing employees or need more information on the CJRS.

My park is closed but I have a couple of caravan owners who are refusing to leave, are self-isolating in their caravan or simply have nowhere else to go

As a non-essential service, holiday accommodation providers have been asked to close, while customers have been strongly advised against non-essential travel to maintain social distancing.

However the Government guidance is that accommodation providers should be able to remain open if:

You should only remain open and accessible to those key workers or vulnerable groups set out above; and for those who are unable to return to their primary place of residence. For all other intents and purposes the park is closed. You may want to close the barriers to the park, and ‘lock down’ as you would during the winter period.

You cannot expel people if they have no alternative accommodation (e.g their place of residence is overseas or rented out), or those with a reasonable basis for being on the park (e.g. staff or key worker).

If your park is to remain open to accommodate key workers, vulnerable groups and other exempted groups, your onsite restaurant will still be able to serve food, subject to the social distancing guidelines (for example by providing a takeaway or ‘grab and go’ service).

The Government has set up a service where you can offer to help, from offering accommodation for NHS and key workers, to the use of your facilities or resources.

Can I allow caravan owners to enter the park to check their caravan or collect items

As mentioned above, for all intents and purposes the park is closed and the barriers are down and locked. However, you may want to use common sense and be pragmatic, taking each request on a case by case basis – particularly for those customers who were not on the park when the closure was enforced and may need to visit to pick up essential items.

Commercially, parks will need to engage with customers to provide reassurance and possibly

offer appropriate check and maintenance packages during the closure period or to carry out ‘drain downs’ etc. The aim here is to preserve the goodwill of the customer and if possible, generate some income by continuing to maintain the park.

You should also review your insurance arrangements and speak to your insurer or broker to get advice about whether changes to cover are necessary during a closed period. At the same time it would be a good idea to ask customers to check their own insurances are not compromised by the lock down.

Now is the time to carry out a risk assessment to determine what new procedures you should adopt to manage risk, and in particular to identify who will manage the park if the owner or senior management fall ill.

What happens to the pitch fees for this year that customers have already paid? Will I have to refund them?

When we all have a better idea of how long the park closure will be enforced, the matter can be revisited and looked at carefully as to how you should respond fairly and responsibly to the situation in which we have all been placed. It may be that you wish to offer a partial refund for loss of enjoyment, or issue vouchers for use in your facilities or clubhouse, but this decision should not be rushed and should be made when we have certainty over the period of lockdown.

What financial support is available from the government during these uncertain times?

The Chancellor has set out a package of targeted measures to support businesses, particularly in the tourism, retail and leisure industry, through this period of disruption caused by COVID–19.

In addition to the Coronavirus Job Retention Scheme and SSP Relief package mentioned above, this includes:

Further details can be found on gov.uk here.

What else can I do to manage my cashflow?

Manage your supply chain. Look at your list of suppliers and identify non-essential spend. Bring all your bills together, analyse them carefully and understand what can be stopped or reduced.

Contact your suppliers and explain that you’re suspending services or restricting them to essentials. Most suppliers will understand your position and will have had similar conversations with other businesses.

Top tip from Ian Rose of Wilkin Chapman Business Solutions:

“Don’t feel guilty: the only thing you can control is the financial viability of your business and these circumstances have been forced on you. We’re all in this together – and all part of a wider supply chain.”


If the measures above don’t keep your business afloat, it’s time to look for help. It’s not as scary as it sounds. Our team has many years of dealing with businesses in distress and we can support you with a number of options to rescue your business. Don’t worry, we’ll get to know you and your business, and help you work out the best way forward.

Be positive

Whilst this time brings uncertainty, it is important to remember that it can also bring with it opportunities. We are continuing to receive new instructions for the sale and purchase of holiday parks and can put parties in contact with specialist funders and/or agents to assist with the sales process.

Now might also be the time to get on top of paperwork and audit your park in preparation for a sale or refinancing; or prepare planning applications or a programme of construction works for the end of the season.

We're here for you

As associate members of the BH&HPA, Wilkin Chapman has a wealth of experience advising the caravan industry and owners of holiday parks in Yorkshire, Lincolnshire and nationwide.

If you would like advice relating to the future of your holiday park business, sales/acquisitions or dealing with the effects of Covid-19 please contact Sarah Kemp by email: sarahe.kemp@wilkinchapman.co.uk or telephone: 01482 398386.

If you need assistance specifically with employment related issues or if you are considering whether to furlough your staff, please contact Oliver Tasker by email: oliver.tasker@wilkinchapman.co.uk or telephone: 01522 515987.


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