The game of golf became even more popular during the pandemic as people sought the benefits of fresh air, exercise and open space. The abundance of golf courses throughout the UK made the industry ideally placed to service this demand and, at the same time, for our clients to think about their overall golf ‘offer’ and the diversification of the golf course industry.
Additional uses at established golf clubs often seek to make the most of existing clubhouses and supporting buildings (for example, weddings and events) but holiday accommodation on golf courses is also now a popular diversification option which can generate lucrative additional income streams.
As a result, we have seen more enquires for supporting holiday accommodation on golf courses and are often asked to provide our specialist planning advice to clients. Holiday lodge proposal on golf courses are very popular, however viability is critical when taking this type of project forward. Our advice is to think about the following areas:
Location
Holiday lodges located near to existing clubhouses and facilities are usually the most practical option. This is due to convenient access to existing site services (gas, electricity, water), infrastructure (access and car parking) and supporting facilities (reception, bar, restaurant) which are all vital components to support any form of visitor accommodation.
Whilst more remote areas on a golf course may be more desirable due to their attractive setting, this sometimes raises practical issues in terms of providing suitable connectivity to the main site facilities and/or the cost associated with new facilities; the latter being costly if the development is located away from existing services.
Phasing
If planning permission is obtained, consider a sensible phasing strategy for your holiday lodge development. It is often better to develop initial phases of, say, 8-10 lodges at a time, rather than to provide the infrastructure for the whole development project on day one and then try and sell/rent holiday lodges with ongoing building work taking place.
Consider providing all of the landscaping at year one so that when the future phases of your holiday lodge development are approaching completion, they will benefit from better on-site screening giving a sense of enclosure and exclusivity for visitors staying on site.
Business Model and Cost
When obtaining a planning permission for holiday lodges to support a golf course business, the most common business model is to sell an element of the lodges (usually through licence agreements) in order to recoup some of the initial capital expenditure during the early operational phases. It is often the case, however, that a business model mix is required for both owner-occupied holiday lodges and lodges that are available for holiday rental (either as independent holiday accommodation rental or to support ongoing events such as weddings).
The typical cost for providing the concrete base and connections to services for a holiday lodge is in the region of £30,000 per unit. Then one must consider the cost of the lodge itself and other indirect costs such as marketing material. In this sense it is important to have a solid viability appraisal with accurate cash follow predictions prior to obtaining planning.