The last few years have seen mixed fortunes in the visitor attractions industry. It is an industry that is extremely diverse in sites and operations and so the effects of Brexit and Covid-19 have impacted these individual businesses differently.

From a property perspective, visitor attractions are most often valued on a profits basis, with consideration to the underlying asset value. The profits method takes into account fluctuations in profits from year to year and typically looks at a minimum of three years' trading and an assessment of the Fair Maintainable Operating Profit that a Reasonably Efficient Operator could achieve.

While there have been limited transactions to demonstrate the impact of Covid-19, experience within other leisure sectors has suggested that purchasers and lenders have taken a long-term holistic view on profitability, discounting to a significant extent the relatively short-term fluctuations, with the impact on values being more muted than perhaps may have been expected.

Nonetheless, while a blip in profitability may be forgiven by a savvy buyer, a lack of long term investment in the site and infrastructure, an inability to adapt and attract new audiences and capitalise on current trends will not.

A number of attractions have sought to cut costs over the last few years, but many of these are fixed such as rent, business rates, insurance, staffing and repairs. Often these costs cannot be significantly minimised. We’ve seen front of house staff have become even more important to a relaxed and reassured visitor experience. It shows that investment in correct staffing levels, within the right positions and supported by good training, will have long-term benefits.

Continued investment in the quality of the visitor experience is essential to footfall maintenance and growth. Following new trends does not necessarily have to cost more: the green agenda and sustainability is increasingly important to visitors and targeted limited investment in this area can lead to cost savings both in the short and long term, such as online booking and e-tickets.

Additionally, accommodation has become a key part of the visitor attraction offering, boosted by the staycations trend and this looks set to stay despite the potential of holidays abroad opening up.

The recommencement of international holiday travel will also reintroduce holidaymakers from abroad to the upgraded UK hospitality market. UK short breaks and destination mini breaks are and can confidently be predicted to remain popular. In the last few years we have seen a wide range of accommodation offerings added to the specific attraction experience, from a themed hotel to woodland glamping.

Typical profit to turnover margins from accommodation offerings are higher than across the board attraction profitability so this can add a profitable boost to help future proof the business and extend its offer into off-peak seasons.

Further information

Contact Amanda Blythe-Smith

Contact Savills Visitor Attractions