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Getting price-gouged by private equity in the UK's happiest resort (2023)

93 点作者 jjar9 个月前

19 条评论

londons_explore9 个月前
Notably... This business <i>owns</i> a <i>lot</i> of forest in the UK.<p>The UK doesn&#x27;t have much forest.<p>So, they can make themselves appear more valuable by pushing up the price of forest land.<p>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.<p>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.<p>Most don&#x27;t sell, but a few do - and thats all you need to make the basis of a new market price.<p>Now when you value all of center parcs land, it looks way better!!!<p>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&#x27;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&#x27;s worth 100x as much.<p>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.
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rwmj9 个月前
PE is terrible, but this isn&#x27;t a good example as there&#x27;s plenty of competition for Center Parcs. Plus they raise their prices during school holidays when there&#x27;s greatest demand, that&#x27;s not an unfair practice, that&#x27;s rationing out a limited resource when demand is greatest, economics 101.<p>Bad PE looks like private equity trying to corner the market in vets[1] and dental practices[2], services that you don&#x27;t really have a choice over.<p>[1] <a href="https:&#x2F;&#x2F;archive.ph&#x2F;bTwcD" rel="nofollow">https:&#x2F;&#x2F;archive.ph&#x2F;bTwcD</a><p>[2] <a href="https:&#x2F;&#x2F;www.lincolninternational.com&#x2F;perspectives&#x2F;articles&#x2F;investors-take-a-bite-into-the-uk-and-european-dentistry-markets&#x2F;" rel="nofollow">https:&#x2F;&#x2F;www.lincolninternational.com&#x2F;perspectives&#x2F;articles&#x2F;i...</a>
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petercooper9 个月前
I&#x27;ve just come back from Center Parcs and have been many times over the past 15 years (but took a break between COVID and now due to their policies over that period). It was fantastic as always, but I&#x27;m not sure everything is well.<p>The park has demand-based pricing for the <i>accommodation</i>, but this doesn&#x27;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&#x27;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&#x27; guests, and I&#x27;m wondering if it has the ability to adapt to this, as well as it adapts the prices of the accommodation.
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roenxi9 个月前
Based on the tone of the article, I think &quot;price-gouged&quot; is how this gentleman would describe <i>any</i> holiday based spending. He doesn&#x27;t seem to like spending money on his holidays one bit. Every time he actually go into detail the practices seem normal and the prices fair.<p>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.
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NeoTar9 个月前
&gt; which is why it’s spelled in the somewhat Francophile Center Parcs, and not Centre Parks. (I thought this is why we did Brexit?)<p>Pardon me?<p>The French for center&#x2F;centre is <i>centre</i> - the &#x27;re&#x27; ending of British English spelling is either taken from the French, or sometimes a direct reference to French spelling (i.e. &#x27;prestige&#x27; spelling - like how some American publications will use British English spelling because they &#x27;look more posh&#x27; or similar).
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snakeyjake9 个月前
I assert that if the occupancy rate is 80%, they&#x27;re charging exactly what they should be charging.<p>If you own a hotel in the US, you are over the moon if you achieve a &gt;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.<p>&quot;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?&quot;
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dwighttk9 个月前
“Price-gouged” is sort of a dog-whistle for me these days… most often when it is used it is a person complaining about a limited resource costing more when in high demand. It’s not always 100% that but usually leans heavily that way on the spectrum.
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mamonster9 个月前
I&#x27;ve eyeballed a little bit, but this doesn&#x27;t even look like 20% IRR. So it&#x27;s not even a &quot;great&quot; P.E deal.
m1019 个月前
This is not price gouging, but rather it&#x27;s a price the market supports.<p>The debt shouldn&#x27;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&#x27;t be able to book except with quick fingers on days of release).
gklitz9 个月前
&gt; As an example, watch the price of a family-sized lodge miraculously double from one week to the next, thanks to school holidays.<p>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.
SteveSmith163849 个月前
Jeez, just don&#x27;t go to Center Parcs already. Everyone knows it&#x27;s massively expensive.
molenzwiebel9 个月前
(2023)
_vere9 个月前
would not happen to you at pontins
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blitzar9 个月前
This is really a story about EBITDA.<p>&quot;People who use EBITDA are either trying to con you or they&#x27;re conning themselves.&quot;
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zuckerma9 个月前
shocker.
bedhead9 个月前
The author wrongly implies that if Center Parcs was just owned by a public company or an individual, that those controlling entities would simply not care about making a profit and wouldn’t charge the prices they do. Author also ignores inconvenient facts such as how the private equity firms actually spent a lot of money upgrading parks in order to make them the desirable locations they are today. I suppose author would’ve preferred they be kept in disarray but cheap?? I could go on but no point. This kind of left wing economic ignorance (redundant?) is tiring but sadly expected. Private equity isn’t perfect but it’s been made out to be some sort of bogeyman it’s demonstrably not.
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lol7689 个月前
This is really partially the government&#x27;s fault.<p>Parents are fined and (in a minority of cases) imprisoned for taking children out of school in term-time. Usually it&#x27;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.<p>During Covid and recent NASUWT&#x2F;NAHT&#x2F;NEU strikes though, it&#x27;s seemingly not been seen as a problem for kids to miss out significantly on face-to-face learning!<p>I think most teachers would agree that, for pupils without a significant attendance problem, a week away (particularly if it&#x27;s towards the end of a term) is not going to make a realistic difference when it comes to attainment for most students.
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zpeti9 个月前
So building an amazing product (as the author says), and then charging however much you can for it is “price gouging”<p>(Thanks Kamala. The only reason I imagine this article popping up now is the price gouging wording)<p>As far as I knew from econ 101 this is generally just supply and demand and efficient pricing.<p>If the price is too high, don’t buy it!!
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mattlondon9 个月前
We stayed for the first time this year with our two small kids. We went &quot;off season&quot; in Jan when prices were reasonable.<p>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 <i>gas ovens</i> (gas! In 2024!) with <i>zero effort at child proofing</i> (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 <i>very</i> 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&#x27;t even safe to cycle around or let the kids run free. There were outdoors playgrounds, but no indoor playgrounds&#x2F;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&#x27;t use it to pay for things.<p>I could go on.<p>We won&#x27;t go back.
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