At some point, usually around the second evening of a Center Parcs break, everything starts to make sense. The car is parked. The bikes are outside. The kids are dirty. A flight time has not been checked, and a transfer has not been a worry. Families in Britain can’t get enough of this kind of vacation, which takes away everything. The company’s four villages have been running at about 97% occupancy, which is a number that most hoteliers would find suspicious if they saw it on a spreadsheet.
The demand for that kind of thing is seen by investors. Early in 2012, Center Parcs announced that it would start building a fifth village in the UK in Woburn Forest, Bedfordshire. The village would be backed by about £250 million in equity and construction financing. Blackstone, a private equity firm that had owned the company since 2006, along with four major UK banks (RBS, Barclays, HSBC, and Lloyds), gave the money. Any way you look at it, it was a serious promise. Since 2004, the site had been involved in green belt planning disputes that took years to resolve. In the end, a Secretary of State had to ignore local opposition to the project and go ahead with it.
It wasn’t a mistake to pick the Woburn site. Center Parcs looked at more than 40 possible sites before choosing the 365-acre Warren Wood area near Flitwick. The strategic reasoning was pretty clear: the four villages that were already there—Sherwood Forest, Elveden, Longleat, and Whinfell—were all in the Midlands, the Southwest, Suffolk, or Cumbria. There was a big hole in the coverage. Woburn is close enough to London and the Southeast to be in one of the areas with the most people in the country. It’s not a gamble for a business that’s almost at full capacity to add supply near unmet demand. It’s just math.
The timing is what’s important, though. At the time of the announcement, the term “staycation” was mostly used on niche travel blogs. It was starting to show up in more general economic conversations. Rising gas prices, a weaker pound, and general anxiety about the economy after the recession were quietly pushing British families to take vacations in their own country.
It was unusually comfortable at Center Parcs, which is set in a forest and has an environment where everyone is welcome. Chief Executive Martin Dalby said that the expansion was based on confidence, which was shown by strong forward booking trends and high occupancy rates in 2011. He might have also been reading a bigger trend in the numbers, like a change in culture that wasn’t going away any time soon.
When it opened in July 2014, the fifth village had 625 forest lodges, a hotel with 75 beds, inside sports facilities, a swimming pool, restaurants, and an Aqua Sana spa. The total cost went from an initial estimate of £160 million to between £230 and $250 million by the time the ground was broken. This is a fairly typical pattern for projects of this size. There are now about 1,500 permanent jobs in the area, and more than 1,200 construction jobs were created during the building phase. At the time, Prime Minister David Cameron said he was happy about the news. But the families who rushed to the lodges as soon as the gates opened may have given a more meaningful endorsement.
When you look back at this growth, you get the sense that Center Parcs knew something about the UK holiday market before a lot of other companies did. The trend of staying home for vacations didn’t start out of nowhere; it had been slowly growing, influenced by cost savings, the desire for simplicity, and parents who preferred the order of nature to the chaos of an airport. Center Parcs was already set up. Building Woburn wasn’t following a trend. It was being brave enough to pour concrete early enough.
It remains to be seen if the sixth village, which is set to be built in the Scottish Borders, will follow the same path. But it’s easy to see the pattern. Find the forest, start the long-planned battle, and wait for the rest of the country to learn what you already knew.
