The UK doesn't have much forest.

So, they can make themselves appear more valuable by pushing up the price of forest land.

Forest land used to be priced based on the lumber value - which is almost nil. There was also the pricing element of the possible agricultural value if it were to be cut down (which is also almost nul, because the land is usually unsuitable for agriculture). There is also the very high value if you were somehow able to build houses on it, but the very low probability of being able to secure permits to do so.

However, I have noticed odd real estate transactions in the last ~decade for forest land. Specifically, a few companies have been buying up lots of forest land, dividing it into tiny parcels, often just a few hundred yards in each direction, and selling it for 10x the price.

Most don't sell, but a few do - and thats all you need to make the basis of a new market price.

Now when you value all of center parcs land, it looks way better!!!

And there is a 2nd factor... Center parcs usually get permission to build lodges on their land as temporary forest huts, and since they aren't made for anyone to be resident in, this is normally seen as an okay use of otherwise protected forest. Gradually over many years they can slowly turn it into a brownfield site by trimming out trees. 20 yrs down the line they might get permission to build actual houses on the land. Suddenly it's worth 100x as much.

I would 100% not be surprised if center parcs end up making more money by this conversion of forest land to residential (skirting laws designed to protect forests) than they make from decades of running the parks.

Bad PE looks like private equity trying to corner the market in vets[1] and dental practices[2], services that you don't really have a choice over.

[1] https://archive.ph/bTwcD

[2] https://www.lincolninternational.com/perspectives/articles/i...

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 at 25-50% capacity, whereas on earlier pre-COVID visits you'd have to reserve weeks in advance. The same was true for the activities - except for the cheapest options like pottery painting. The cost of living crisis seems to have truly hit Center Parcs' guests, and I'm wondering if it has the ability to adapt to this, as well as it adapts the prices of the accommodation.

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 deal. Still an interesting read.

Pardon me?

The French for center/centre is centre - the 're' ending of British English spelling is either taken from the French, or sometimes a direct reference to French spelling (i.e. 'prestige' spelling - like how some American publications will use British English spelling because they 'look more posh' or similar).

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 hot tub and pool table, very obviously meant to be split amongst four couples eight ways, an entire fourteen hundred bucks ($175 ea.) per night?"

The debt shouldn't make a difference to pricing unless debt free owners were reducing pricing below what they could charge (with the trade off being that you won't be able to book except with quick fingers on days of release).

This is just market mechanics. School holidays is when families with school aged kids are looking to get a place so the demand is higher. This happens to everything. It’s not some dark conspiracy to gouge out people. If some folks are willing to pay TWICE what you want to pay, just to get the same place then they are allowed to do so and you can’t complain that you don’t get it for half the cost, you could just book your stay outside the school holidays if you want it cheaper.

"People who use EBITDA are either trying to con you or they're conning themselves."

Parents are fined and (in a minority of cases) imprisoned for taking children out of school in term-time. Usually it's the ones who are honest that end up getting in trouble, and the others that can pass it off as sickness get away with it.

During Covid and recent NASUWT/NAHT/NEU strikes though, it's seemingly not been seen as a problem for kids to miss out significantly on face-to-face learning!

I think most teachers would agree that, for pupils without a significant attendance problem, a week away (particularly if it's towards the end of a term) is not going to make a realistic difference when it comes to attainment for most students.

(Thanks Kamala. The only reason I imagine this article popping up now is the price gouging wording)

As far as I knew from econ 101 this is generally just supply and demand and efficient pricing.

If the price is too high, don’t buy it!!

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 await the inevitable news story about a family getting blown-up when their 18 month old accidentally turned on the gas oven...). You are made to feel very unwelcome if you have the temerity to try to leave the place not at the scheduled time - getting back in by car was like trying to pass through a Berlin Wall checkpoint or something equally unpleasant. Many activities were only for 3 years+. Despite not being allowed to drive your own car, there were a lot of service vehicles and the like driving around the place so it wasn't even safe to cycle around or let the kids run free. There were outdoors playgrounds, but no indoor playgrounds/soft play apart from tiny ones attached to restaurants (perfect combo that: recently fed kid and jumping about....), and the outdoor playgrounds were mostly unsuitable for kids under 5 ... This is the UK - it rains all the time so you need indoor options! You have to wear an electronic wristband everywhere you go to e.g. use a locker or unlock your door, but you can't use it to pay for things.

I could go on.

We won't go back.

It would be a bit harder for families with kids in different schools, but probably most schools would be _more or less_ the same, with just a bit more variation to spread it around a little bit.

You will never get people to understand this concept. Never. People genuinely think that they would be able to causally login a month before holidays and book a cabin at normal pricing for a week.

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.

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 especially, if it means organising the stocking of the cars like Captain Scott preparing for a zombie apocalypse.

See also NT picnicing: https://www.theguardian.com/lifeandstyle/ng-interactive/2023...

Of course, the best bit of the holiday was never going to be a manky old restaurant, you can have those anywhere. It was the forest, the cycling without threat of being turned into chunky salsa on an A-road, the unusual accomodation, the pool, the lodge bubble baths and most of all the fact that blocky-cushioned sofas disassembled into amazing fortress construction materials.

E.g. Center Parcs makes insane gross margins e.g. food and drink because prices for those ARE insanely expensive relative to other places you could go out and eat. BUT that doesn't actually lead to crazy levels of profitability because it's a capital intensive business that requires lots of capex and/or debt financing to sustain.

The whole point is to take a deeper dive than most surface-level commentaries of "bloody hell Center Parcs is expensive" and see what's actually going on under the hood of the business.

And calling it 'price-gouging' is a bit of a nod to that, and it's a bit of a joke about how expensive a crap steak is there, and it's a way to get people's attention. Like other people have said, Center Parcs is mostly just a function of supply and demand. They have a great product, and people like me are willing to pay for it.

I don't mind spending a lot on holidays and travel, but we didn't return to Centre Parcs for this reason. It crossed the line from expensive to unreasonable.

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

I don't intend to at all imply that Center Parcs would be better off as a public company, or in the hands of a private individual. I'm pointing out that the surface level commentary of "bloody hell Center Parcs is expensive" is misleading, and the reality is much more nuanced than that, hence the need for a deep dive into the financials. Points I make in the article:

1) Center Parcs makes great gross margins on accommodation and food & drink, and EBITDA looks great, but that's a misleading way to look at the business precisely because it's capital-intensive, and the owners -- whether PE, public, or a private individual -- have to continue to reinvest maintenance or growth capex to keep it that way. And that requires either cash or debt, there's no way around that.

2) I contrasted it with a couple of capital-light businesses to show the difference in P&L and balance sheet dynamics, precisely because people often misunderstand capital intensity and the impacts on the business model.

3) I gave a restated measure of profitability (EBDAT), and show the normalised free cash flow which show that Center Parcs is a fairly normal performing business with decent but unspectactular returns. It's definitely not the case that the PE owners are simply pricing things high and raking in the cash.

4) I showed that the expected valuation of £4.5-5bn might be difficult to achieve at a time of rising interest rates, because both capital intense businesses and large PE deals require lots of debt. I make no value judgment on the use of debt -- debt is a tool to use in any business, and just like a surgeon's scalpel, it can be used for good or for harm.

Again, this is much more nuanced than 'PE bad, high prices bad' which is the surface-level analysis that I'm poking fun at in the title and in the piece.

I generally agree with this, but discretion doesn't scale. If you allow teachers to use discretion to approve absences, it will create the opportunity unfair system, where people who the teacher likes more may get preferential treatment. And even if the system isn't actually unfair, it'll create the perception of unfairness (Joe was allowed to go early, why can't my son?).

It's also way easier for a school to say "no early absences, that's the national policy", and not have to get into constant arguments with parents.

In Norway there seems to be no requirement to attend school, only a requirement that the children be educated. The headmistress tried to pressure my wife to not take the children out but the only penalty she could apply was a vague threat that there might not be places available when they got back.

One idea that might reduce the problem that the UK has would be to adopt the Polish system of dividing the country into four school regions with staggered holidays.