Holiday parks are a cornerstone of Australia's tourism industry, offering a mix of accommodation options that cater to a broad spectrum of travellers. These parks are typically located in scenic or high-demand tourist destinations, providing self-contained cabins, powered and unpowered campsites and facilities like swimming pools, playgrounds and communal cooking areas. Traditionally designed to deliver a more affordable holiday experience, holiday parks appeal to families, retirees and adventure seekers alike.

Often situated near beaches, national parks and regional attractions, Australia’s holiday parks provide tourists with easy access to natural beauty and outdoor activities. Holiday parks are also particularly attractive for families due to their child-friendly amenities like water parks and playgrounds. Additionally, the rise of domestic travel and the appeal of caravan or RV vacations have contributed to their sustained popularity.

At BMT Tax Depreciation, demand for tax depreciation schedules on holiday parks has seen a notable increase over the last decade, reflecting a growing investor interest.

The popularity of holiday parks as an investment is due to their strong income potential, diverse revenue streams, and appreciating land value. Many holiday parks occupy prime real estate in coastal regions or near major tourist attractions. Over time, the land itself appreciates significantly, adding long-term value to the investment.

Holiday parks can generate income from various sources including cabin and campsite rentals, on-site facilities like water slides and mini-golf courses, retail revenue from convenience stores or cafes, equipment rentals for activities like kayaking or cycling, as well as the hosting of special events like weddings or corporate retreats.

With domestic tourism flourishing and a growing trend toward nature-focused holidays, holiday parks enjoy relatively consistent occupancy rates, even outside peak seasons. Beyond families, holiday parks attract a wide range of travellers year-round, including retirees, international tourists, and adventure enthusiasts, further reducing the impact of seasonal vacancy rates. In 2023, Tourism Research Australia reported that Australians embarked on $15.3 million caravan and camping trips, contributing a total of $14.3 billion in spending, a figure that continues to grow.

As we enter 2025, holiday parks are continuing the transformation to meet shifting consumer expectations and capitalise on emerging trends, with a clear focus on eco-tourism, accessibility and luxury additions.

The NRMA Parks and Resorts recently partnered with the Queensland Government in the $28 million Turtle Sands holiday park eco- renovation, with guest accommodation including camping and caravanning sites, state-of-the-art villas and glamping tents. The resort operates off-grid using solar power and implements strict measures to protect the local marine turtle population.

In 2022 the Caravan Industry Association of Australia (CIAA) and Ecotourism Australia started a partnership aiming to provide a sustainable tourism pathway for caravan and holiday parks across the country to reduce their environmental footprint and attract the eco-conscious traveller, reflecting a sector-wide commitment to sustainability.

More holiday parks are investing in accessible cabins and facilities to accommodate travellers with disabilities or limited mobility, with some of the largest parks in the country introducing purpose-built, waterfront cabins designed for ease of access. This focus on inclusivity not only broadens the appeal of holiday parks but also aligns with societal trends toward equitable and barrier-free travel options. Recent data from Tourism Research Australia highlights the importance of these efforts, revealing that 20% of visitors to caravan parks or commercial camping grounds reported a disability or long-term health condition.

To capture a more exclusive market, many holiday parks are introducing additional premium accommodation like glamping tents, luxury cabins with private hot tubs and boutique dining experiences. These upgrades cater to travellers seeking a high-end experience while still enjoying the outdoors.

These innovations are set to be game-changers for the industry, appealing to a broader and more diverse clientele while elevating the overall holiday park experience.

Holiday parks are not only profitable in terms of income generation but also provide substantial tax benefits through depreciation deductions. Property investors can claim depreciation on both Division 40 plant and equipment and Division 43 capital works, significantly reducing their taxable income.

Depreciation can be claimed on the construction costs and equipment associated with water slides, splash zones and play structures.

Easily removable assets like ovens and refrigerators in communal kitchens and BBQ areas, along with other shared facilities, are considered plant and equipment assets.This classification allows owners to claim deductions on their decline in value. Additionally, capital works deductions can be claimed for the wear and tear of fixed structures associated with these facilities.

The wear and tear on the structures of cabins, glamping tents and other private accommodation within the park qualify for Division 43 capital works while the furnishings like beds, refrigerators and kitchen utensils can be depreciated as plant and equipment assets.

Even external improvements like landscaped gardens, paved walkways and outdoor lighting can generate depreciation deductions.

For investors ready to tap into this lucrative market, it’s essential to understand the full scope of tax benefits available to maximise cash flow on this investment property.

To discover how much you could save on your tax bill, contact BMT Tax Depreciation on 1300 728 726 or request a quote to start your journey toward smarter property investment.

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