Introduction

The UK’s tourism sector is experiencing remarkable growth. According to VisitBritain, 2025 is projected to welcome a record 43.4 million international visitors, with spending expected to reach £33.7 billion. This surge presents compelling opportunities for property investors seeking diversification beyond traditional residential investments.

Holiday lodge investments offer a unique combination of property ownership and hospitality sector exposure, with the added benefit of potential personal use alongside financial returns.

The Tourism Market Opportunity

The strength extends beyond international visitors. British residents made 117.4 million overnight visits within Great Britain in 2023, spending £31.3 billion. This dual demand from international and domestic visitors creates a resilient foundation for holiday accommodation investments.

American tourists alone are forecast to spend £6.7 billion in 2025, accounting for nearly one in every five pounds spent by international visitors, demonstrating the premium spending power driving this sector.

Holiday Lodge Investment Benefits

Unlike traditional property investments, holiday lodges offer several distinct advantages:

• Lower Entry Costs: Typically requiring smaller initial investments than standard residential properties
• Professional Management: Most developments include comprehensive management services
• Higher Yields: Peak season rates often exceed traditional rental yields
• Personal Use Options: Many allow limited owner use for holidays
• Tax Advantages: Classified as lodges, they often avoid stamp duty and benefit from different tax treatment

Case Study: Rookery Manor Lodges, Somerset

Rookery Manor Lodges exemplifies a well positioned holiday lodge investment. Located in Somerset near attractions including Weston super Mare, Cheddar Gorge, and the Mendip Hills, the development offers:

• Fully furnished luxury lodges from £150,000
• 12% NET guaranteed rental income for 5 years
• 100% buy back option in Year 5, personally guaranteed
• Zero stamp duty and legal fees
• Professional management by Hoseasons partnership
• Only 3 lodges remaining

The guaranteed return structure addresses typical holiday letting concerns around occupancy rates and seasonal income variations.

Investment Considerations

Holiday lodge investments suit specific investor profiles. The seasonal income patterns differ from traditional rentals, with peak summer months generating 60 to 70% of annual returns. Professional management typically costs 15 to 25% of gross income but removes day to day operational responsibilities.

Location remains crucial, with coastal areas, national parks, and regions with strong transport links showing consistent performance. Due diligence should cover site management quality, lease terms, and local tourism patterns.

Risks and Rewards

Like any investment, holiday lodges carry specific risks including tourism volatility, seasonal dependency, and competition from increasing supply. However, the growing preference for domestic holidays and experience based spending supports long term demand.

The sector benefits from several trends: continued staycation popularity, rural tourism growth, and increasing consumer spending on experiences rather than material goods.

Financing and Returns

Holiday lodge financing typically requires specialist lenders and higher deposits (25 to 40%) compared to residential mortgages. Interest rates are generally higher, reflecting the perceived increased risk profile.

Successful lodges achieve annual occupancy rates between 60% and 80%, with gross yields often exceeding traditional property investments, though operating costs are typically higher.

Conclusion

Holiday lodge investments represent an interesting diversification opportunity for property investors comfortable with seasonal income patterns and seeking exposure to the UK’s growing tourism sector.

Developments like Rookery Manor Lodges demonstrate how guaranteed return structures can provide income certainty whilst benefiting from tourism growth. The key lies in selecting quality locations, experienced operators, and understanding the unique characteristics of this asset class.

At Global Phoenix, we help clients evaluate holiday lodge opportunities alongside other property investments to determine the most appropriate strategy for individual circumstances.

Interested in exploring holiday lodge opportunities like Rookery Manor Lodges? Contact Global Phoenix to discuss how this investment type might complement your portfolio.