There was surprise amongst the UK holiday industry on Friday at the announcement that the iconic holiday firm Pontins is to enter Administration. Accountants KPMG were called in on Friday evening to find that the summer bookings have collapsed and cash flow problems have subsequently meant the holiday chain will enter into administration. The largest creditor (the Santander bank) is thought to want to keep it going as a going concern for several months in the hope that a new buyer can be found to save the company. The sale process will probably take 2 to 3 months.
The collapse of Pontins comes as a shock because of the huge increase in the number of UK residents taking the so-called ‘Stay-cation’ (as the recession bites and the power of sterling abroad weakens). Many families are choosing to cut costs by renting a holiday homes in the UK or visiting holiday parks such as Pontins or Butlins for cheaper holidays. The group employs over 850 people and runs five sites in Somerset, Sussex, Suffolk, Wales and Merseyside.
The group also suffered from extremely bad television publicity this year regarding the standard and cleanliness of it’s holiday park facilities. The huge growth in families holidaying at home in popular hotspots such as the South West has seen a mini boom in Holly home rentals and bed and breakfast bookings.
The holiday group continues to accept bookings and claims to have catered for 5000 guests this weekend alone. It is famous for it’s seaside blue coats and for providing family entertainment for working class holidaymakers at the lower end of the market. Administrators KPMG are seeking an experienced operator to run the Group in the interim while a buyer is found. They commented’ Pontins is an iconic British brand which forms the backdrop to thousands of treasured family holiday memories” it has unfortunately struggled in the current economic environment but, with some support from new management, we are optimistic that it will be part of thousands of family memories in years to come”.
Pontins has also come under intense competitive pressure in the last two or three years, as his main rival Butlins has invested heavily in new hotels and better facilities to attract holidaymakers with greater spending power. In addition the number of holiday homes and second homes on the market has increased as private investors have failed to sell the property or have sought to cash in on the increase in the number of people choosing to rent out a holiday home in the UK.