Caravan parks are back on the roadmap for investors with tourism return

More families and younger fans are taking to the wide open Australian roads post-COVID-19 towing a van or driving a recreational vehicle.

The rise in caravan and RV sales over the past decade shows they are no longer just considered a retiree holiday option, according to the head researcher for Ray White Commercial, Vanessa Rader.

Real estate agencies like Ray White are pointing to the investment potential of caravan parks as domestic tourism lifts.

The number of registrations of caravans and RV's is rising between 3-4 per cent each year per annum.

During COVID-19 registrations rose to 5pc per annum during the pandemic before demand outstripped supply.

Much like the broader motor vehicle industry, there have been delivery delays in sourcing new vans and RV's, Ms Rader points out.

The new electric RV's which are just starting to come onto the market are also adding to those delays and the first offerings come with limited range and hefty prices.

The towing performance and impact of the range of new electric vehicles is also being tested.

Queensland is home to more than a quarter of all caravan and RV registrations.

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Ms Rader said caravan park sales across the country totalled $204 million last year, about a third down down on the year before when COVID-19 restrictions ended.

Despite the number of sales dropping last year, it was still a 43pc lift on 2020.

"The reduction in turnover during 2022 is in line with the broader commercial market which has been hampered by the growing difficulty in obtaining finance," Ms Rader said.

While the hotel and leisure sector saw an uplift in activity during 2022, caravan parks assets remained tightly held by investors keen to capitalise on their positive cashflow, as well as future land banking, keeping transaction activity down, she said.

Over the past four years we have seen demand from travellers increase across caravan, camping and cabin sites, excluding lockdown periods.

Domestic tourism rebounded last year with increases in hotel occupancy rates and demand for caravan and camping sites lifting.

The national occupancy average (for caravan, camping and cabins) for 2022 sits at 61.5pc.

This is well ahead of the pre-COVID-19 period back in 2019 with a 49.4pc result.

Tasmania and Queensland have continuously averaged above the national rate, while Western Australia has bucked the trend showing high occupancy during the lockdown periods in other states.

Rising prices have accompanied the increased demand.

Rates have growing, more than 43pc in NSW to average $46/site.

Queensland averages $42/site up 36.7pc while Western Australia averages $52/site, up 16.6pc.

Ms Rader said the investment potential for caravan parks "looks sound" due to their long term potential, the boom in domestic tourism levels and increased drive segment.

"The current high cost of airfares and accommodation has aided in the uplift in demand for occupiers, keeping vacancies low and the prospect of continued rate increases high," she said.

"The large land parcels associated with these sites are also attractive, opening up future opportunities and alternative uses as well as their often positive cash flows stemming from high occupancy and growing returns."

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