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Outdoor Accomodation is digging out its heels

In this constantly changing environment, campsites have undertaken a critical ‘self-examination’ with the aim of ensuring the sustainability of their model. Even if it has not really felt the impact of the economic crisis, given the dynamism of its activity in 2013, the camping sector must nevertheless adapt its product to evolving behaviors and expectations of consumers. Now, the sector has to address barriers, namely the surge of OTAs, the impacts of the economic crisis or even the stringency of impending regulations for campsites, which are slowing down its development.

Key facts

  • Number of campsites in France: 8 381
  • Number of overnight stays in 2013 : 108.6 million
  • Estimated turnover for 2013: 2.2 billion euros
  • French outdoor accommodation sector’s rank at international level : 1st in Europe and 2nd worldwide

The camping sector does not know the crisis, particularly in France, where it has, for many years now, enjoyed a strong popularity from national as well as European clients. In the current economic downturn, they are indeed looking for financially advantageous solutions for their holidays and prefer closer-to-home getaways. A recent study by Camping & Co reflects the success of this formula in France, stating that 95% of the French have already camped. Indeed the country has the first outdoor accommodation capacity in Europe, ahead of Germany and the United Kingdom, and the second worldwide, after the United States. French campsites also attract an important number of international tourists every year. This is especially true for the European market given that France has more than a third of the campsites on the continent. At the beginning of 2014, the “Officiel des Terrains” has recorded approximately 8,380 institutions. The product in France is fairly well distributed in the following categories,  6% of the campsites have positioned themselves as one-star, 23% as two-star, 28.5% as three-star, 11.5% as four-star and 2 % as five-star (the remaining 29% being unclassified).

For several years now, the outdoor accommodation sector has been differentiating itself from other tourist accommodation by the dynamism of its activity. The 2013 season has ended on a new positive trend, with an increase of 2.66% in the number of nights spent by customers compared to the previous year, thus reaching nearly 108 million. These strong results are particularly due to the massive investments made by the industry over the past 20 years to meet the needs of an increasing and more demanding market. They have allowed the sector to achieve an estimated turnover of € 2.2 billion in 2013, an increase of almost 120% compared to 2000.

Diversification of facilities and upmarket positioning

Over the past few years, the camping sector has been structuring and modernizing itself in order to adapt to the expectations of new clients in terms of comfort and services. “Campsites must now adapt to a new clientele that expresses different needs from their traditional clients. They are holidaymakers who have been falling back on France for some years now for economic reasons, namely the current crisis in Europe, and the geopolitical instability of Middle Eastern and North African destinations,” pointed out Gregory Lecoutre, Marketing Manager of Homair Vacances.

Being now familiar with resort hotels which are well developed in these destinations, these new clients are demanding more services to accommodation facilities where they are staying, pushing campsites to develop their services as well as to provide new equipment and animations. A survey conducted by the “Officiel des Terrains” reveals that 42% of French campsites are now offering access to a WiFi network (i.e. 500 more sites in a year), 44% have a pool on site (i.e. 40% more than in 2000), 37% offer a catering service, 41.5% a grocery store or a supply point, and 23% a tennis court. To meet these new expectations Homair Vacances has, for example, "undertaken the standardization of its product and introduced new and innovative facilities, such as the spa, the development of sport activities, air conditioning in mobile homes, or even free wifi at one point of the campsite,” explained Gregory Lecoutre. Regarding facilities which are more upscale, we can, for example, find equipment related to welfare. 6.5% of French campsites are now equipped with Jacuzzi, while 4.5% of them have a sauna.

Not only the facilities, but also the formulae are closer to hotel offers , formulas are also closer to the hotel offer and it is not unusual nowadays to stay at the campsite on a half board or full board and even soon enough on an all-inclusive basis. "The concern for comfort, ergonomics, and integrated landscape designs is more present than ever in order to transform the structure of campsites into real outdoor resorts. Moreover, the quality of the accommodation facilities (thermal or noise insulation ...) and their design (partitions to isolate given portions of the accommodation facilities so as to suit the traditional hotel demand) will allow the extension of the seasonality of this sector and make profitable infrastructures which are more and more qualitative (indoor water parks, spas, whirlpools, restaurants ...)," summarized Guillaume Patrizi, founder of Camping-and-Co.

The arrival of new consumers naturally strengthens the diversity of the customer-mix for the camping sector with an increased diversity in travelers’ profile as well as the product. "The main trend today is market segmentation. The customer base consists of different groups that must be satisfies: couples, young and older generations, families with young children, people over 50 years, families with children in school, or even groups and mini-groups. Each of these segments has different needs whether on the period of stay, on the type of facilities or accommodation available, or the infrastructures, the activities and the entertainment proposed,” explained Ludovic Pierru, Director France, of the tour operator Vacansoleil, who created his own campsites chain in 2003 and has now three four-star establishments in France.  Campsite facilities have begun to diversify their offerings to offer tailored products for each customer profile in order to better respond to market demand. In this sense, Vacansoleil has, for example, started "to offer a few years ago three-bedroom mobile homes and also another type of mobile home with two bathrooms, ideal for two couples or a family with teenagers." The same goes for Homair Vacances: "Customers are also demanding more variety in products offered, therefore we are working in this direction so as to no longer propose an offer identical to the mobile home.  We have worked on the landscape and the decoration of our products and have created themed zones within our facilities, such as surfing," added Gregory Lecoutre.

Apart from the accommodation type, diversity also means the variety of destinations offered, and the current trend for urban stays does not spare the camping sector. The formula attracts namely holidaymakers wishing to combine outdoor accommodation with housing and a city break. Even Paris is following this trend, having its own supply of mobile homes and camp pitches at Camping Indigo Bois de Boulogne.

These new developments and the strengthening of services in the industry have enabled the camping sector to organize themselves and to gradually climb the segments to be closer to the most star rated lodging categories. This upmarket movement also enables professionals to differentiate themselves in a competitive market. Having launched rental deals several years ago, they have turned to amore exclusive offer to show the current trend of "Glamping" (a contraction of the words "camping" and "glamour"). Close to the boutique hotel concept, it is for travelers seeking charm and authenticity without forgoing comfort. It is often accompanied by an ecological concept, related to the camping and the closer-to-nature aspects of the stay. Just like traditional hotel concepts, campsites are trying to stand out with the originality of the experience they offer and are always developing more unusual concepts such as yurts, floating mobile homes, old trailers, or even treehouses

With its effort to reorganize and consolidate its service catalog, the camping sector is gradually getting closer to the hotel sector while the latter is faced with the emergence of pop-up hotels and itinerant rooms. The border between the two models tends to grow thinner and they are increasingly facing similar problems.

The camping sector faces new challenges

As for the hotel industry, the rise of online booking centers is not without consequences on the distribution system of campsites. These centers have indeed taken over the camping sector’s direct sales. The sector is therefore impacted by adverse business practices of some booking centers. It finds itself today in a threatening situation. To address this issue, the Fédération Nationale de l'Hôtellerie de Plein Air (FNHPA) rallied themselves through the training of its members with good attitudes to adopt when working with online agencies and the creation of ethical guidelines with suppliers of intermediate systems. This organization has also associated itself to the professionals of the hotel sector in their struggle for to make the government put in place an efficient legal framework to protect the whole tourist accommodation business.

Changes in consumption habits, the rise in power of Internet in the tourism sector and the economic downturn that motivates households to preserve their purchasing power, the camping sector has, for some time, been developing a greater dependence on last minute sales." Last-minute reservations are a phenomenon which is becoming increasingly important, and campsites are living what happened to the hotel sector a few years ago," explained Gregory Lecoutre from Homair Holidays. The trend has pushed the camping facilities like Homair, to implement yield management policies similar to those found in hotels." We therefore have a strategy to readjust the price at the last minute and do bargain sales without cutting prices as some competitors. We need to better target the demand with daily monitoring and an hourly adjustment of prices, "declared Gregory Lecoutre. Camping & Co has developed a similar strategy in its network, hereby explained by its founder, William Patrizi: "Camping-and-co allows the owners of the campsites to extend and amplify their trade policies. We have built bridges with the main software editors of the profession in order to examine pricing and availability in real-time. As such operators have for the first time an efficient tool to apply a yield management policy suited to their occupancy rate."

The rise of online reservation centers and the growing trend of last minute bookings are a real challenge for the camping sector. The latter is having difficulties to provide fundings to continue to invest in its development process. As explained by Bernard Sauvaire, CEO of Yelloh! Village: "We are now faced with the phenomenon of OTAs and integrated campsites groups creating a crumbling of prices with last minute deals. This reinforces the decline in turnover and weighs upon investments in the sector." According to him, the sector may enter into a downward spiral in investments. The price decline driven by a slight imbalance between demand and supply, the significance Internet is taking in the purchasing process and increases in VAT, is slowing investments in the infrastructures. It consequently affects the quality of accommodation, causing prices to shrink. A study by the FNHPA clearly confirms the current trend of postponing investment in facilities and rental housing: 52%  of campsite operators surveyed said that they intend to reduce their investments for heavy works (swimming pools, buildings), while 46% of them plan to decrease their investment in rental housing. Professionals are concerned about this phenomenon, which could eventually lead to an aging of the rental housing stock and equipment, thus affecting the attractiveness of the sector.

This downward trend of investment in the camping sector is also reinforced by the gloomy current economic situation of France and a legal framework hardly conducive for development. Professionals criticize the tax burden that the industry faces. "Our business is doing well, we are recording a good occupancy rate and gross turnover is also satisfying. Nevertheless, we suffer from the rise in VAT from 5.5% to 10% in recent years. Indeed, this increase has not been passed on to customers but absorbed by the institutions, thus the negative impact known by the gross turnover,” described Bernard Sauvaire. The stringency of the legal framework applicable to the camping sector adds up to the situation as explained by Grégory Lecoutre: "The challenges we face are the regulations and standards that govern this profession. Some laws are a bit too severe and the investments required from us are difficult to be met."

If campsites still have many years ahead of them through their growing power of seduction for the French and international market, to ensure the sustainability of their success they need to adapt to major changes in the sector of tourist accommodation. While campsites are developing their product through the consolidation of their services and the launching of new products, these outdoor facilities tend resemble more and more to the hotel sector, taking both its advantages and its drawbacks.

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