Holiday Home Investments #2 Leisure Industry

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 Video Transcription: 

Hey guys, so let's talk about holiday home investments. Let's talk about the leisure industry, so the actual... Now, when we talk about a leisure industry, if you do Google searching and think, you know, when you're doing your research and you're thinking, "Let me have a look and see what the leisure industry involves." Okay, so you're gonna find it's a massive industry, okay. It's about £200 billion industry. So, it's massive okay, 2.6 million jobs, okay. Nine percent of the workforce are devoted to leisure via the leisure industry. Now it's a huge industry. I mean you think about it. We work five days and then we have two days off, so you know, if it's two-sevenths of the economy, well yeah, that's probably about-ish...that's rough calculations, probably not right. But you know what? It's a huge industry.

Now what we're talking about here is not every bit of that industry. That industry, we're not talking about hotels, we're not talking about camping or caravans, or food, or health and fitness, or pubs. Pubs, you know what I call them, attractions you know, Alton Towers and places like that. You know, none of that we're talking about, health spas things like that. That's all the leisure industry. So when you're researching it, you may get a lot of stats that talk about all the different aspects of that. So what you want is the accommodation side of that. So, the leisure industry accommodation. Okay, and in particular holiday home accommodation, because that's the industry that we're talking about here. So just to frame you, that's what we're sort of looking at, all right? So don't confuse what it is. The other thing is when you're doing your research, don't confuse when you read things about things like, you know, "The leisure industry is struggling," when they're talking about the food, because actually what's happened with things like Delivery Room and Uber Eats and all these sorts of guys, is they have taken...they've increased the business by, you know, fantastically, but a lot of them are struggling. Because what's happening is a new industry, all the players, there are lots of players and they're vying for the winning and soon what will happen is a few of them will drop off and they'll be the winner. Okay, so for some of those companies, you may be hearing about how bad things are going. You know what? And that's correct. They could be going pretty bad, but the reality is, the actual holiday home accommodation industry that we're talking about is doing fantastic.

Okay, you're looking at... It's meant to grow to £117 billion, you know. We've got, you know, it's 5% predicted growth per annum, and that's compounded year after year. So, you know, that should see your property when you buy it, which by the way you're buying it as a leasehold, 999 years in most cases. So actually it's similar to a buy-to-let in terms of that structuring, but what you're looking at is the potential for capital growth. Okay, at the end of the day it sits on a plot of land and it has a building and that will grow over time because it's worth more value because the property around it will be worth more. Okay, so you're gonna get a capital growth side of this, which is fantastic, but we'll talk about more about that later.

Look, the top 100 UK holiday companies turn over £27 billion, so that's massive. That's the top 100. Okay look, you know, the great thing is, if you look at recent sales of holiday parks, and we're talking about Park Dean went for 1.35 billion. Park Holidays went for £362 million. Park Leisure went for, I think was £103 million. You know, see these are parks, and some have caravan and camping and some will have holiday homes on them and that sort of thing. But you know, this is big industry and what's started to happen, one of the reasons, what attracted me to this, was the amount of big pension funds and wealth funds, whether they be in the U.S. or wherever, that have started investing in these things and buying them as assets, okay. So if we can get a piece of that and we can sort of dovetail onto those guys, you know to hold onto their shirt tails, then we can take a piece of the action for ourselves, and that's really what we're looking at. Well, the big boys have started a move into this. If we can professionalize and get in there and get our own a little bit, fantastic, and that's what we're looking to do with this thing.

So, leisure industry, awesome, okay. But we're looking at the accommodation, the holiday home accommodation, and you know, sometimes it's called self-catering. You can have a look at Holiday Parks, you know, all these sorts of things are what we're actually looking at, so that's part of the industry that we're talking about. So, guys, I'll leave it there, you can jump online and do lots of research now. On this particular thing, you'll see lots and lots fact you'll see lots and lots of good and bad because as everything and I will make this point here, we're not looking at creating new holiday parks or new holiday home accommodation. What we're doing is we're taking an existing park and we're buying into that because it's got an existing business. It's got P&L balance sheet, and we can actually see what it's been doing and we, you know, interpolate. "Well actually, you know, what if we renovate these houses were likely to drive the income, get better occupancy, professionalize it." Because a lot of these sort of holiday parks, like the hotels that we did are a very much mum and dad's running them and have run them for 20 years. The kids don't wanna run them because they've seen their mum and dad have to work too hard, and so they're off gone to the cities, and now mum and dad left with this thing that they really need to invest money in to really bring it up to standard.

They haven't got the money, that's when the pension funds come, buy the asset, you know, redo the whole thing, renovate the whole thing, knock down places, put up new buildings, and all this sort of stuff. And that's really the opportunity that we're trying to, you know, grab hold of. So the existing stuff, not new stuff, okay. And that's one of the keys because for me there's gonna be a lot of this, you know, stuff, crap sold, yeah? There will be you know, "We're putting in a new holiday park. Buy one of the hundred bl-la la la la," and you know what? It's gonna be a similar story where they don't actually get built, it doesn't come through. You put your money in, somebody's made a good sales commission and it doesn't come off. We're going for the existing stuff because it's there, you're getting the asset, it's done and dusted, okay. Which means you're getting income too and a lot of these sort of things too will do guaranteed incomes for three or five years or whatever it is, okay. All, right guys, we'll leave it there, have a great day, live with passion we'll see you in the next video.