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Getting price-gouged by private equity in the UK's happiest resort (2023)

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Re: Getting price-gouged by private equity in the UK's happiest resort (2023)

#61

Post by ggm »

bedhead wrote: post #47

The author wrongly implies that if Center Parcs was just owned by a public company or an individual, that those controlling entities would simply not care about making a profit and wouldn’t charge the prices they do. Author also ignores inconvenient facts such as how the private equity firms actually spent a lot of money upgrading parks in order to make them the desirable locations they are today. I suppose author wo…

Which is actually more utilitarian? An experience anyone including the working poor can experience or glamping?

Not "which makes more money" and not "which is nicer" which actually benefits more people?

Re: Getting price-gouged by private equity in the UK's happiest resort (2023)

#62

Post by krisoft »

mattlondon wrote: post #40

We stayed for the first time this year with our two small kids. We went "off season" in Jan when prices were reasonable. I can see the attraction but centre parks does not feel like a great place for small kids. There is no laundry facilities in the lodges, and not even anywhere on site! The heating kept resetting to 14c overnight in January. There are gas ovens (gas! In 2024!) with zero effort at child proofing (I a…

> I await the inevitable news story about a family getting blown-up when their 18 month old accidentally turned on the gas oven...

What do you mean "accidentally turned on the gas oven"? Do they not have flame failure devices?

> We went "off season" in Jan when prices were reasonable. ... This is the UK - it rains all the time!

Now you see why off season is off season.

> there were a lot of service vehicles and the like driving around the place so it wasn't even safe to cycle around

How many service vehicles would make it "not safe to cycle around"? Do you cycle anywhere?

Re: Getting price-gouged by private equity in the UK's happiest resort (2023)

#63

Post by snakeyjake »

michaelt wrote: post #44
snakeyjake wrote: post #28

I assert that if the occupancy rate is 80%, they're charging exactly what they should be charging. If you own a hotel in the US, you are over the moon if you achieve a >70% occupancy rate. You are a hotel god. You are a master of the hospitality domain, Cornell will give you an honorary degree in Hotel Management, and you have made both supply and demand your bitch. "Oh my! Why is this four bedroom luxury lodge with…

Four couples eight ways?! Nah, that four-bedroom lodge spends much more time occupied by two parents with three children.

Based on the three YouTube tours of four bedroom exclusive lodges in Woburn I skimmed through prior to making my comment to be sure I understood the context of the lodge, it appears to me to be configured for adult use.

Each of the four "bedrooms" is more like an attached suite, the dining room is configured for eight adults, and three children and their parents do not seem to require a sauna that large.

Children can't be ruled out, however, as one of the videos noted that a high chair is available in a storage closet.

Re: Getting price-gouged by private equity in the UK's happiest resort (2023)

#64

Post by petercooper »

grues-dinner wrote: post #35
petercooper wrote: post #4

I've just come back from Center Parcs and have been many times over the past 15 years (but took a break between COVID and now due to their policies over that period). It was fantastic as always, but I'm not sure everything is well. The park has demand-based pricing for the accommodation , but this doesn't apply to activities or restaurants. We dined out every day, yet despite the park being full, the restaurants were…

I remember going to Center Parks maybe 25-30 years ago with my parents and another family (all in one lodge). I also remember humping in bags and bags of food and drink and getting the bikes off the car roofs. Perhaps it's just a return to the ancient British Dad tradition of not paying for the optional extras after briefly convincing we millennials that every worthwhile experience has an uplift fee. Even, perhaps es…

That's a popular way to do it! But I think it may end up being the way to do it, at this rate. The restaurants used to be very popular in spite of the prices. We eat out as we don't want to cook (enough of that when we go camping!) and the quality of the restaurants is genuinely good (especially their gluten free provision). Whoever buys CP will need to adjust to a new reality though and go much further down the price scale for purchases within the park (one place that was always extremely busy was the Starbucks!)

Re: Getting price-gouged by private equity in the UK's happiest resort (2023)

#65

Post by pydry »

rwmj wrote: post #20
ajb wrote: post #17

Earlier quoted context omitted.

Oh that's why forest land has gone up so much! Thanks, I'd seen the same rise, and couldn't figure out why.

It's also because an exception to inheritance tax that covers farm land and forests. Rich people have been buying up both (Dyson owns several counties now). https://www.gov.uk/guidance/woodland-owners-tax-guidance https://whoownsengland.org/2017/09/19/why-is-james-dyson-hoo...

I wonder if Starmer included this loophole in his list of "painful tax rises" he promised for next year's budget.

Re: Getting price-gouged by private equity in the UK's happiest resort (2023)

#66

Post by thebruce87m »

krisoft wrote: post #62
mattlondon wrote: post #40

We stayed for the first time this year with our two small kids. We went "off season" in Jan when prices were reasonable. I can see the attraction but centre parks does not feel like a great place for small kids. There is no laundry facilities in the lodges, and not even anywhere on site! The heating kept resetting to 14c overnight in January. There are gas ovens (gas! In 2024!) with zero effort at child proofing (I a…

> I await the inevitable news story about a family getting blown-up when their 18 month old accidentally turned on the gas oven... What do you mean "accidentally turned on the gas oven"? Do they not have flame failure devices? > We went "off season" in Jan when prices were reasonable. ... This is the UK - it rains all the time! Now you see why off season is off season. > there were a lot of service vehicles and the l…

First time I tried to preheat the oven at Center Parcs I nearly blew us up.

Re: Getting price-gouged by private equity in the UK's happiest resort (2023)

#67

Post by grues-dinner »

rwmj wrote: post #22
jampekka wrote: post #14

Earlier quoted context omitted.

What did the PE company build here?

It says in the article the current PE company invested millions to update the sites.

That they did, but they're servicing massive amounts of debt to be in the position to do so (i.e. to own the company).

It's obviously a thing you may do, and it's what PE does do. Just as the article said, it's fundamentally the same idea as renting out a mortgaged house.

But it also means that what's actually going on is that the business is really just the catalyst for the actual transaction of interest: moving money from the consumers to whoever lent the money to the PE firm in the first place. The PE firm business is to get paid to be the middlemen.

More is spent paying for the debt then is spent on the capital expenditures. New things and maintenance of existing things combined are well under the approximate £100m debt bill. The thing is, Center Parcs has existed for decades, so the debt is sort of artificial: if it had never been bought on finance by PE, there could be, say, £100m per year more to spend (capex, opex, whatever) without changing prices to the consumer at all.

It's a bit like being in that rented house, but the house was sold by an outright owner who could afford a install a new boiler to someone on a 80% LTV mortgage and now the landlord needs to put the prices up to cover the interest because their rates went up. Yes, the new owner couldn't have afforded the house without loading up on debt, so it's nice for them that someone will front the cash to get then into the landlord business. If no one can afford to build outright, it's also good that there are ways to pay for the capex at all, or no one could build any houses in the first place(1). But it's cold comfort to the tenant in question who is now personally paying for all the "value added" for less ability to get a new boiler then they had before.

(1) I'm unsure how much debt enabled the original Sherwood Forest site to be built at all, but £32m in 1987 isn't chump change. Then again the base rate was over 8%, so debt was pretty expensive. It was double that at around 15% in 1989 when they opened the second site. So, considering they didn't sink, either they had good profitability straight away or a small debt load.

Re: Getting price-gouged by private equity in the UK's happiest resort (2023)

#68

Post by ninth_ant »

rwmj wrote: post #6

PE is terrible, but this isn't a good example as there's plenty of competition for Center Parcs. Plus they raise their prices during school holidays when there's greatest demand, that's not an unfair practice, that's rationing out a limited resource when demand is greatest, economics 101. Bad PE looks like private equity trying to corner the market in vets[1] and dental practices[2], services that you don't really ha…

The reason PE is often viewed as terrible is that it seems to be strongly correlated with short-term-optimized business practices which end up being destructive to most stakeholders.

The general playbook: Borrow a bunch of money and use it to buy an existing company, pay yourself a bunch of money, extract a bunch of profit by ripping off customers and not reinvesting in the company, sell or go bankrupt. Everyone loses except for the people who paid themselves handsomely along the way.

As described in this story, Center Parcs doesn't seem to be following this playbook. Charging money for peak demand is not something unique to them, to PE companies, and not even remotely new. However, underinvesting in the company and hiding that behind financials that look good at a superficial glance -- as done in this article -- well let's just say I wouldn't be eager to buy without doing some extreme due diligence.

Re: Getting price-gouged by private equity in the UK's happiest resort (2023)

#69

Post by roenxi »

mattlondon wrote: post #42
roenxi wrote: post #9

Based on the tone of the article, I think "price-gouged" is how this gentleman would describe any holiday based spending. He doesn't seem to like spending money on his holidays one bit. Every time he actually go into detail the practices seem normal and the prices fair. It took me a while to realise that this article does not seem to involve any price-gouging of any sort but is actually about pricing a private equity…

You are trapped in centre parks and they control the prices for everything. On a normal holiday you have choice of where to eat or what activities to do etc. You don't get that at center parca - it is like a stationary cruise ship where you can only leave when they allow it.

Well, yes. That does appear to be what the people are paying for. The point here seems to be a sort of naturalist luxury experience in a carefully over-managed environment. I see this as similar to getting on the cruise ship and then being surprised that there isn't an independent marketplace on board.

If someone goes to a luxury accommodation experience and then become perturbed at being charged luxury prices, that seems to be a problem with their expectations.

Re: Getting price-gouged by private equity in the UK's happiest resort (2023)

#70

Post by notahacker »

mattlondon wrote: post #42
roenxi wrote: post #9

Based on the tone of the article, I think "price-gouged" is how this gentleman would describe any holiday based spending. He doesn't seem to like spending money on his holidays one bit. Every time he actually go into detail the practices seem normal and the prices fair. It took me a while to realise that this article does not seem to involve any price-gouging of any sort but is actually about pricing a private equity…

You are trapped in centre parks and they control the prices for everything. On a normal holiday you have choice of where to eat or what activities to do etc. You don't get that at center parca - it is like a stationary cruise ship where you can only leave when they allow it.

But it's a trap you've chosen to walk into, when there are literally millions of alternative ways to spend your holidays that don't involve staying on a company's private estate whose main attraction is a wide range of chargeable activities which it's the only provider of in the area. As with activity prices on cruises the natural response isn't "gollygosh how did you survive?" it's "if that sort of thing bothers you why did you pick that holiday?". As the rest of the article goes on to clarify, it isn't even like the operators are actually making a killing when you consider the amount of investment involved in buying woodland and waterslides (and that the half-term surge prices for accommodation are the bookends for months of low occupancy).

Plus if you really hate their catering prices, there's nothing stopping you driving to the cafe or supermarket in the next village and bringing your own bikes

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