Holiday Park closure and rescue options
Operating a holiday park comes with its own set of challenges, such as managing seasonal income variations and covering rising costs for staffing, maintenance, and utilities. For many park owners, these financial pressures can become overwhelming, making it vital to understand the insolvency options available.
This guide aims to provide clear and practical advice specific to the holiday park industry. By understanding your choices, you can take the necessary steps to address financial difficulties, whether through restructuring, securing additional funding, or pursuing closure.
Common financial challenges for holiday parks
We can help advise on specific financial issues your holiday park may be facing, including but not limited to:
- Seasonal revenue fluctuations
Holiday parks can often experience inconsistent income due to peak demand during summer and school holidays contrasted with low occupancy in off-peak seasons. Weather conditions can further negatively impact bookings, particularly for outdoor-based accommodations. With these issues negatively affecting cash flow, we can help you assess the solvent position of your company and look at possible insolvency proceedings. - Rising operational costs
Holiday parks typically operate on a high-cost basis, with expensive overheads such as energy costs, seasonal hires, and insurance premiums increasing the cost of running businesses. By acting quickly, we can help you navigate these expensive costs and advise on the best solutions if these have caused financial issues. - High staff turnover
Due to the seasonal fluctuation of holiday parks, businesses are usually highly reliant on their work force, and the ability to retain key staff whilst having the flexibility to recruit for peak times. We understand the importance of ensuring that staff understand their redundancy pay entitlements and how a Transfer of Undertakings Protection of Employment rights (TUPE) would work during company restructuring. - Renovations and upgrades
To remain competitive, holiday parks must frequently look at upgrading their infrastructure, improving and modernising accommodation and facilities while looking at new attractions. This typically comes alongside the need to meet sustainability and environmental standards. These renovations undoubtedly come at a high cost, if you’re struggling to meet these costs, we can help you understand the commercial finance, or insolvency options available to your company. - Bounce Back Loans (BBL)
The government-backed Bounce Back Loan Scheme provided a lifeline for many businesses during the COVID-19 pandemic. However, companies are now struggling with BBL repayment terms. We can help guide you through the available repayment options and explain how a BBL will be treated in different insolvency scenarios.
How we can help rescue your holiday park
Below are two formal insolvency procedures, which would allow your holiday park to continue trading whilst protected from creditor action:
- Repay your company debts in a payment plan via a Company Voluntary Arrangement (CVA)
A (CVA) is a structured repayment plan that enables businesses to manage their unsecured debts through affordable monthly payments to creditors. Spanning for up to five years, upon completing a CVA the remaining unsecured debts at the company will be written off. By entering your holiday park into a CVA, the procedure provides your company with protection against creditors, giving you the opportunity to continue trading and to maintain the company’s strong brand and reputation, whilst slowly reducing the debt level.
More on Company Voluntary Arrangements - Restructure your company through administration
By placing your holiday park into administration, it will be in a temporary state of protection that enables the business to continue trading. As licensed insolvency practitioners, we will take on the role of administrator, aiming to rescue your company as a going concern. This may mean restructuring the business, streamlining operations, making staffing changes or finding new investment. The administrator will also consider possible exit strategies from the procedure, whether that be a potential sale of the business, assets, the whole company, or transitioning to an alternative insolvency procedure.
More on administration
How we can help close and liquidate your holiday park
If your holiday park is insolvent and creditor pressure has reached a level which means the business cannot continue to trade, formal liquidation would draw a line under its operations and write off its unsecured debts.
- Close your holiday park down via a Creditors Voluntary Liquidation (CVL)
A CVL is a formal insolvency procedure for companies that are insolvent. By entering into a CVL, your holiday park would cease trading and once closed, would end all of the company’s obligations. The process would see your company’s assets realised, while terminating outgoing payment agreements like loans and leases. Once the procedure is finished, any unpaid unsecured debts will be written off. If eligible, yourself as a director and employees will be able to apply for statutory entitlements such as redundancy and holiday pay. If the company cannot afford to pay staff entitlements, claims can be made through the Redundancy Payment Services.
More on Creditors Voluntary Liquidation - Close your holiday park down and start again via a Pre-pack Liquidation
A pre-pack liquidation is an informal term for a type of liquidation where a company pre-purchases the assets of an existing company that is then liquidated. If your holiday park were to enter into a pre-pack liquidation, it would allow you to continue its core business in a new limited company, without any historical unsecured debts associated to the previous company. With minimal disruption to the business’s brand, customer base and operational activity, the new limited company will be able to retain key assets to the business and under TUPE regulations, you can also transfer employees. In some cases, you may be able to reuse your company’s trading name, but this can be complex. We can advise you on these processes and how it works.
More on Pre-pack Liquidation
Commercial finance for holiday parks
If your company has steady cash flow but is at risk of being impacted by a significant upcoming payment, commercial finance could provide the support you need. There are several financing options that can help you manage one-time expenses or cover shortfalls in revenue. Contact us to explore the best commercial finance solutions tailored to your company’s situation.
More on commercial financeHow to get in touch with us: The next steps
If your holiday park is facing financial difficulty, it’s important to understand the different closure and recovery options available. Our initial advisers will offer a comprehensive explanation of the different options available to you and our experienced consultants will look at tailoring our processes to your company’s circumstances.
Contact our initial advisers, who can advise you on your company’s solvent position and outline the options best suited to its circumstances.
- Speak with our initial advisers
Contact our team via phone or online chat. If we can help, we will arrange a free consultation with one of our consultants to discuss your situation in more depth. - Initial assessment
During the consultation, we will advise if an insolvency procedure is the most appropriate route forward or what alternative options are available. - Formally engage with Wilson Field
After your consultation, if there is an appropriate route forward, we will issue the relevant documentation for you to formally engage us.
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