Holiday park yields and EBITDA explained

A holiday park's return is best understood through its EBITDA and the multiple at which parks change hands, not a simple rental yield. EBITDA, the earnings before interest, tax, depreciation and amortisation, is the figure a buyer and a lender work from, because a park is a trading business whose value comes from sustainable profit. Understanding how that profit is built, how durable each part of it is, and how it converts into a value and a loan is the most useful skill for assessing whether a park stacks up.

This guide explains how park earnings are worked out, the difference between turnover, EBITDA and adjusted profit, what a realistic conversion looks like, and how the earnings shape the finance available. We arrange holiday park finance as a broker and introducer, not a lender, and worked examples here use deliberately simple, illustrative numbers. This is general information rather than investment advice.

Turnover, EBITDA and the multiple

Turnover is the park's total income; EBITDA is what is left after running costs but before interest, tax and the non-cash charges of depreciation and amortisation. The gap between the two is wide on a park, because running a site is costly: grounds and maintenance, utilities, staff, rates, insurance and marketing all come out before you reach EBITDA. Savills' Holiday and Home Park Update 2025 put operator profit conversion at around 29 per cent in 2024, a reminder that under a third of turnover typically reaches the profit line on a holiday park.

Parks then sell on a multiple of that EBITDA, with the multiple reflecting the quality of the earnings, the tenure, the licence, the location and the growth potential. A park with durable recurring pitch-fee income, freehold tenure and a twelve-month holiday season commands a higher multiple than one reliant on cyclical caravan sales, on a short lease, or closed for winter. Savills also reported an average transaction value of around 34,192 pounds per pitch on holiday static parks in 2024, a per-pitch sense-check that sits alongside the earnings multiple when sizing a park's value.

The income mix and how durable it is

Not all park income is equal in a valuer's or lender's eyes. Recurring annual pitch fees and service charges, paid by the holiday-home owners who keep their caravans on the park, are the most durable and most highly valued, because they recur each year with a relatively sticky customer base. Touring, camping and glamping pitch income is seasonal but recurring. The caravan-sales margin, the profit a park makes buying static caravans and lodges and selling them sited to customers, can be the single largest profit line on a developing park, but it is more cyclical and depends on continuing to find buyers and to have development pitches available.

Assessing a park therefore means looking past the headline EBITDA to its composition. A park whose profit rests largely on recurring fees has a more durable, more financeable income than one of equal profit that depends on selling a set number of caravans each year. A park that has sold out its development pitches has a very different forward profile from one with room to grow. This is why several years of accounts, the pitch-fee schedule and the forward stock and pitch position all matter when working out what a park is really worth.

How do you work out a park's adjusted EBITDA?

Start with the accounts and rebuild the earnings from the bottom up. Take the turnover, separate the recurring pitch-fee and service-charge income from the more cyclical caravan-sales margin and ancillary trade, then subtract the full running cost base: grounds, utilities, staff, rates, insurance, marketing and a realistic allowance for replacing infrastructure and stock over time. The result is the operating profit, which a buyer then adjusts for owner-specific or one-off items, such as an owner's salary above or below a market rate, non-recurring costs or income, or expenditure a new operator would not incur.

This adjusted EBITDA is the figure that drives both value and finance, so the discipline is in the inputs: honest costs, durable income and conservative adjustments produce a defensible number, while optimistic add-backs and forgotten costs produce a fantasy. As a deliberately illustrative example, a park turning over 1 million pounds at the sector's roughly 29 per cent conversion would show around 290,000 pounds of EBITDA, on which a value and a loan would then be built. The rental yield calculator on this site lets you model the income and cost lines for your own park.

How do the earnings shape the finance available?

A park acquisition mortgage is sized on the park's sustainable, adjusted EBITDA and the strength of the asset, not on a residential loan to value. The lender checks that the earnings cover the loan payments with a comfortable margin under a stressed interest rate, usually expressed as a debt service cover ratio, and lends against the lower of a loan to value cap, typically around 50 to 65 per cent, and what the earnings can service. A park with strong, durable, well-evidenced EBITDA supports more borrowing at a given price than one with thinner or more cyclical earnings.

This means the income evidence does as much work as the headline value. A park reliant on caravan sales, or with weak tenure or a restrictive licence, will have its borrowing capped by the lender's caution regardless of its current profit, while a park with durable recurring fees and good tenure borrows more comfortably. Presenting the earnings, their durability and the tenure clearly is what unlocks the strongest terms, which is the packaging work we do as a broker. The how much can I borrow calculator on this site gives a starting estimate of the loan a given EBITDA can support.