An Interview With Tony Clish About the Holiday Park Sector

Tony is currently focusing on some consultancy work in the sector, but doesn’t rule out taking a permanent role if the right opportunity presents itself.

We had the opportunity to discuss with Tony his career and unique perspective on the sector. You can find him on LinkedIn by clicking here.

An Interview With Tony Clish

1. Could you introduce yourself and tell us about your background?

I was born and bred in the North East and had a strange entry into the industry as I think probably lots of people had. Part of life is about finding out what you don't want to do, before you stumble across what you do want to do. So for some strange reason, I did a chemistry degree and realised very quickly I didn't want to do a chemistry degree. 

I was very lucky at the end of it to get a place on the Graduate Management Training programme working for Vaux brewery back in my native North East, and they kindly funded me to do an MBA at Newcastle. I wanted to get into business management and marketing, especially. An MBA is a great way to learn about business very quickly and I was then able to get a fantastic opportunity to join the Rank Organisation and Haven Leisure, to look after their caravan sales and marketing. I thought I would learn a lot from the biggest name in leisure, which the Rank Organisation was at the time.

I moved South and very quickly realised that it was a great industry, and full of opportunities. I was in my early 20s and thought I'd stay in the industry for three years or so. Now almost 40 years later, I have had a long career in the sector with various businesses and enjoyed every minute.

Whilst at Haven I was approached to go and run Haulfryn, which I enjoyed, before rejoining colleagues from Rank and setting up Great British Holiday Parks, which we eventually took private, getting involved with private equity. And then Park Holidays UK started in 2006, which has also been a great journey, with a series of private equity owners. So yeah, it's been a great space and a great time to be involved in the sector. 

2. That's quite an extensive background in the industry. Are there any highlights that particularly stand out?

Well, I think that the sector historically hadn't really been exposed to private equity. And I was involved with perhaps the first investment in the industry from private equity, which was 3i's involvement in Haulfryn and then RBS with GB Holiday Parks. So it was good to be one of the pioneers, if you like, in getting private equity into the sector. It’s proven a good model, as they're very good business partners and investors. The industry has evolved an awful lot over the period, mainly for the better.

3. That segues into my next question quite nicely. You've been in the industry for a long time. Are there any particular trends you've noticed over that period?

Well, I think that the changes are more on the caravan sales side than they are on the holiday side, and it reflects around the quality of product. And dare I say, the quality of the customer. A long time ago, the season was quite short and the product was all 28 x 10 ft, with no double glazing or central heating. Since then there’s been innovation from manufacturers, changes to spacing on parks, investment in restructuring parks to allow for large units, and investments in facilities, which private equity has played a role in. 

Then there are the buyers of today - there are many more affluent people in the lodge market than there would have been 30 odd years ago. So that has broadened the base of the industry, and led to a broader product type, covering everything from top of the range lodges through to glamping, including a whole range of products in the letting market. So, it's a much more diverse industry, and it's been a great space to be involved with

4. We're talking from an insider's perspective here. Are there any misconceptions about the industry that you've noticed from outsiders? 

I think there were historically, but 20 odd years ago, it was a very closed industry. There weren't many people from the city, for example, who were involved in holiday parks. Whereas now, that has certainly changed. There's been new blood coming into the industry, so there's a much greater degree of knowledge. Therefore, there shouldn't be any ignorance. Plenty of mistakes are still made, but I don't think that's on the basis of myths. It's probably due to a lack of understanding rather than anything else. 

5. And in terms of challenges, have you noticed any kind of common struggles that park operators face in starting a new business or scaling an existing business? 

I think there's challenges to both. I'd say it's more difficult to start from scratch than it is to take an existing operator and change it. Evolution is easier than revolution. And I think that the main challenge from a greenfield perspective is that there's no customer awareness to build on. If a location is fairly remote, away from competitors, you're trying to sell something from scratch and your marketing costs are going to be high. And if you're starting with nothing, all of your costs are estimates. It's much easier to take an existing business with significant potential that's been undermanaged. 

But the other thing is that as you grow any business, you've got the challenges of changing scale and keeping costs proportionate. And there are definitely some step changes as you grow from being a one park operator to a multi park operator, as it becomes necessary to evolve your style of management. You want to make sure you've got good people around you with different skill sets as the business grows. It's more difficult when you're growing from being a small operation to a medium sized operation, but it’s easier when you're bigger because you can have very good people in all the roles. 

It's interesting to look at those businesses as they all have different strengths or weaknesses, from the outside looking in. And you don't really know that until you get involved with some of the operators in the sector. 

6. If you had to give some advice to an operator looking to grow or expand their business, what would you say to them? Is there a secret sauce?

Well, I think it's a combination of multiple details. Nobody is going to get all the decisions right, but if you get 8 out of 10 decisions right, you're doing well. I think if you look at the businesses that have thrived and those that haven’t grown as quickly as they should over the last couple of decades, I would say it would boil down to borrowing. Don't be afraid of debt. If you're good, back yourself and go for growth as it has been a very good sector. 

I think being numerate is probably one of the biggest skills that anyone can have in the industry because you need to really understand your numbers in terms of building a business model. If you're presenting to banks and potential investors, you really need to convince them that you know what you're talking about. And as you go through those growing pains, you need to make sure that you're in control of things. 

7. You previously talked about acquisitions and how that was a new model when you were starting out. Can you speak a little about that? Do you have any advice for growing a business in this way?

Well, it's interesting that there are trends and fads with how you value business. Many years ago, the business was valued in terms of price per pitch. So over X pitches, it's Y pounds per pitch and therefore the value of the business is Z. After this we had discounted cash flows, and now we've gone on to earnings multiples. And the debate is always - what are you multiplying and what is the multiplier? 

There's pros and cons in all those models, but the weakness of the EBITDA multiple model is that it pays no real value to potential. So, if you can buy a business at a sensible multiple that is underperforming, and it's got assets that aren't being used or can be changed, it can be a good acquisition. The classic in the holiday park sector is touring pitches that can be converted or the season extended. It's a slightly historic valuation model to look at EBITDA multiples because, as an entrepreneur, you're not really interested in what the last guy did; you're interested in what you're going to do. 

And so having that skill set and being able to buy based on a backward looking number and knowing that you're going to add value going forward is the best way to drive M&A. So a large and underperforming business that has probably been a bit unloved but is in a good location - that is a fantastic opportunity. 

8. If you were to start a park business from scratch today, how would you go about that? What steps would you take? 

Well, I guess there's two ways - buying an existing asset or developing a greenfield site. The numbers can be easier on the first model because it's easy to get bank debt in place. Regarding the second option, due to planning changes, there’s limited potential supply out there. It's difficult if you're starting from scratch in an area where there are no established competitors. There's an old adage that if you're going to start an estate agent, start where all the estate agents are; because you're going to nix some of their footfall. Therefore, I'd say start where you know there's demand. 

And I always think it's better to look through the eyes of a caravan buyer than through the eyes of a holidaymaker because the value added in the sector really comes from driving caravan sales. Why? Because it's a capital light model, and it's the area where you need a smaller volume of people to say yes than you do to build a big letting business. So, I would say pick a location where you know you're going to be able to sell caravans. 

Also look at drive times and catchment areas. As an example, when fuel prices go up, expected drive times go down. So, for that reason, I'd rather be in Dorset than in Cornwall or in Kent rather than West Wales. 

The mixed model where you can flip between caravan sales and holidays is one of the big benefits of the sector. And we used to argue that they're countercyclical. Generally, when it's a tough time for caravan sales, holidays are good, and vice versa. They're not exactly countercyclical, but having two eggs in your basket is better than having one.

9. If you were to design the ultimate park experience, combining all of the best elements from your career, what would that park look like? 

Well, it's operational property. So location, location, location is the biggest part of the mix and the one thing you can't change. Everyone's got their own favourite locations. If I was to merge my personal likes with my business likes, I’d go for Dorset. 

There's a holiday park called Sandhills (part of Park Holidays) which is fantastic. It's very small, with a unique setting, and in very high demand. You overlook the Isle of Wight on the front and Christchurch Harbour on the back. So that would be the location I'd pick. If you’ve got a great location, the beauty of that is that you don't need great facilities. You need a USP, or multiple USPs, to have a great business. And if you've got a fantastic location, you don't need the capital investment that you would if you're trying to sell a second tier location. There are, however, some great examples of facilities all around in the UK, with some excellent entrepreneurs emerging in the sector over the last couple of decades. 

So the perfect park would have a very attractive swimming pool and a nice, quiet club. I think that the way clubs have evolved over the last 10 years has helped to attract a more affluent customer compared to the sort of Hi-de-Hi! clubs of the past. So, yeah, I'd say something on the Dorset Coast with nice facilities. But I’d keep it quiet because we don't want everyone else to go there!

10. With your wealth of experience in the industry, if you had to give some advice to young professionals or perhaps aspiring leaders looking to break you into the industry, what would you say to them? 

Well, I'd say to an individual, it's a great place to be. You know, most people coming into the sector end up staying. It's a way of life as much as it is a career. If you can pick, you want to be around winners that work hard and that are going places. Even if you're brilliant, with a bad team and a bad business, you're not going to get very far. So look very carefully at where you go. 

Also businesses backed by private equity that are making acquisitions provide opportunities for growth. There's some great businesses out there, but the growth potential that private, equity-owned businesses provide is a wonderful opportunity. 

Caravan sales is a great place to be and a good way to earn. If you can then leverage that, you can gain skills and go into managing a group of parks or buying a group of parks yourself. And there's some great examples of people that have started out working in businesses and then gone on to start their own. Some people have established really good businesses and financially, have done very well for themselves.

11. If you had to change any aspect of the industry, what would it be? 

Well, I'm in a fortunate position that while I've been inside the industry for a long time, I now have the benefit of standing outside, so I can take a slightly broader view. The legislative framework in which we operate is quite outdated. Although the industry didn't like it at the time, the changes made in the Mobile Homes Act 1983, in hindsight, have been very good. 

I think at some point in the next decade, there's likely to be a transition to increasing consumer rights for buyers as currently, the power in the sector between the customer, the park operator, and the manufacturer sits very much with the park operator. So I would say to park operators - treat your customers with a lot of care and respect. Treat them well when they're buying, and treat them well when they want to leave. Because if we don't, we run the risk of legislative change being imposed. That said, we shouldn't fear it, because for the residential sector, it was actually good news and allowed the industry to move to a higher price point and attract a different customer profile.

12. And looking forward, is there anything that particularly excites you about the future of the industry? 

I think we've had some very good tailwinds that have helped us. We've been in such a sweet spot, benefitting from Brexit and COVID. The fact that it's more difficult to buy property and take pets abroad was a benefit of Brexit, for example, which has shifted demand to the UK. This is in addition to the demographics of older people growing wealth with inherited income through property. But even through COVID and the changes in working practices, we've seen a net benefit. 

There are many sectors that have had a real rollercoaster through the last 5 years. And I'm not saying it's been a piece of cake in our industry, but we haven't seen the huge slowdown that some leisure sectors have experienced. Gardening and cycling are two examples that have struggled since the distorted peak of COVID and supply chain issues. 

I think that all of the benefits that have been around for a long time; supply and demand, multiple income streams and the scarcity of multiple groups for potential investors - they still exist. If you were starting from scratch, it wouldn’t be possible to get planning for holiday parks in the most beautiful parts of the UK, which is where a lot of them currently are. You can't take away these positives, meaning the sector is well set for the future. 

13. And after a varied career, you've now transitioned into a consultancy role helping other businesses drive growth. Can you speak about what you're doing now?

For sure. It's been great over the years to meet so many people in the industry. So now I get to take those relationships to a deeper level and help colleagues with some of the challenges that they find in their businesses. Answers to these challenges generally exist in the data, which I love analysing. In this way, you can look at a business and be surprised by some of the things that they're doing well, and those that they’re finding more difficult. 

As I'm essentially a marketer by background, I love the consumer journey and crunching the data to understand how you win the digital battle. We talk about the funnel in sales and marketing, and winning the top of the funnel to help improve efficiency down the funnel is what I get a real kick out of. Then by looking at the design of the end product along with investment and acquisition decisions, I can help businesses grow.

14. That's great. And what does a day in the life of Tony Clish look like currently?

I think it's always important, whatever stage of your career, to get your life work balance right. You need challenges in life, and they're not all in the office. I've always enjoyed running and cycling, and started doing triathlons a few years ago, so I've had more time to do that. I'm doing my first Ironman next year which is something I never thought I would do. I may not get to the finish line, but I’ll certainly get to the start line!