For her annual luxury treat with her mother, Shreeya Patel chose Center Parcs Woburn Forest in April for an overnight stay — not in one of the woodland lodges the holiday resort is known for but at a suite in a spa.
“I loved the surroundings . . . surrounded by trees and the lake and you just feel like you’re on holiday,” said the 35-year-old recruiter who lives in Hertfordshire.
The pair enjoyed treatments from a menu of 25 options, ranging from a relaxing floral steam bath to a healing herbal sauna based in a forest. “I just loved the views,” she said.
Patel is an example of the kind of customer Center Parcs, known for its family-friendly holiday packages, is now hoping to attract. Rather than solely focusing on expanding its traditional offering — especially as it faces challenges in finding new sites — the group is chasing growth by upgrading existing assets and in particular tapping into the wellness trend, in which visitors seek out beauty treatments as a key part of their break.
Spas are “one of many growth opportunities that we have”, chief executive Colin McKinlay told the Financial Times.
Having spent £22mn renovating the Aqua Sana spa facilities and putting a dedicated team in charge, the company wants to triple the number of visitors to the facilities to 45,000 external guests per month in the coming years.
Should they achieve this it could be a significant chunk of the overall total — the six sites across the UK and Ireland welcome around 2.3mn guests each year — with the spas the only facility open to outside guests, boosting Center Parcs’ appeal beyond families.
Aqua Sana spas have existed for more than 30 years but remained “basically underutilised”, McKinlay said. “We actually have the capacity today to grow it.”
They are now “attracting a new community of external guests who also may not necessarily have been to Center Parcs before”, he said, as spas work as an entry to showcase what the rest of the park offers.
Aqua Sana in the Elveden Forest site in Suffolk was the latest to reopen last September after a £6.5mn makeover.
The spa business is understood to generate annual revenues of £33mn, which accounts for 5 per cent of the group total. The group is doubling its marketing spending this year to raise the Aqua Sana brand profile, McKinlay said.
Analysts said upgrading and promoting spas was a sensible move. The UK wellness sector — which includes physical activities and public health as well as spas — generated $224bn of revenue in 2022, up 31 per cent from 2019, according to the Global Wellness Institute.
While there is little room for growth from existing sites given that the holiday parks are operating already at near-full capacity of 97 per cent, “the risk taken with adding an entirely new site is huge”, according to Richard Clarke, an analyst at Bernstein. A new park would require massive capital investment and also runs the risk of cannibalising demand with existing sites, he added.
He said attracting more visitors to its spa, some of whom will only visit for a day, was a good strategy. “What you’re always aiming for as a hospitality operator is to make your facilities as full as possible, as much of the time as possible . . . there [may be] a better opportunity to use that for third party guests,” he added.
It also makes sense given the mixed picture for consumer spending. Saxon Moseley, head of leisure and hospitality at RSM UK, said while there is an uptick in real wage growth and consumer confidence, “what we’re seeing is that people would prefer to spend more on a smaller treat or experience than put money towards a big ticket” — such as a long holiday.
“There remains some nervousness around large spending, but this smaller spending is coming back,” he said, adding that a spa session or cookery lesson in a hotel are the kinds of activities people are now willing to spend on again.
While McKinlay argues that “demand is as strong as ever,” the overall health of the UK domestic travel market is less rosy than it was. After a staycation boom during and following the pandemic, the number of overnight domestic holiday trips fell last year by 14 per cent year-on-year to 37mn, according to VisitBritain, as more people chose to go overseas.
Hotel bookings in popular destinations such as Cornwall and Devon are down 7.5 per cent for July and August compared with last year, while those in Dorset and Somerset are down 4.7 per cent, according to property data group CoStar.
“With the cost of [flights and travel] going up . . . people are going abroad in big numbers” but have become “selective” when it comes to domestic travel, said Cristina Balekjian, director of hospitality analytics UK at CoStar.
Center Parcs last week posted a 19 per cent drop in pre-tax profit of £98.4mn for the year to April, due to refinancing £330mn of debt at higher interest rates. However it reported a record core profit of £310.5mn, up 2 per cent, driven by its highest-ever number of repeat customers and increased spending in its villages. Revenues were £704.1mn, up 0.6 per cent.
Center Parcs is still searching for a potential new development in the UK, with McKinlay saying the process is “very well progressed,” but declining to comment further. The company scrapped a plan last year to build a new village in West Sussex, following “rigorous environmental and ecological site surveys.”
The group plans to invest £80mn in the 12 months to April 2025. It will expand the Longford Forest village in Ireland with further nearly 200 lodges and restaurants, add new accommodation in Elveden and refurbish existing accommodation elsewhere.
Center Parcs was put up for sale last year by its Canadian private equity owner, Brookfield for more than £4bn, but the attempt was abandoned amid subdued investor sentiment due to higher interest rates and inflation.
Although dealmaking in the UK hotel sector has revived speculation of a sale, McKinlay declined to comment, adding “it’s natural that Brookfield would look at its options for the business”.
Brookfield said it is “actively supporting Center Parcs as it looks to deliver on the strong growth avenues ahead”.
