Manufacturers and Consumer Law...

For most people, purchasing a holiday home is an exciting and rewarding experience, but what happens when a manufacturer doesn’t deliver what they promise? We explore some of the challenges that customers and holiday parks have faced during the past couple of years.

There is no denying that the unforeseen and unprecedented challenges arising over these past few years, have taken a significant toll on businesses and individuals alike. Whatever your ‘new normal’ looks like, we can all agree things just aren’t as they once were, and we’re having to adjust to new standards and ways of living.

Whatever the industry, commodity or service, we have learned to tolerate certain inevitabilities, such as materials shortages, price increases, logistical complications and delays with international shipping, HGV driver shortages and even Royal Mail strikes.

The UK tourism & leisure industry has experienced mixed repercussions. Periods of stagnation from forced closures and stringent social distancing rules, have been followed with huge surges in demand for UK-based holidays and an increased trend towards renting or owning campervans, mobile homes, static caravans or holiday lodges, as alternative and more affordable options to owning a 2^nd home. These afford many people a greater level of freedom and flexibility, to focus their lifestyle on achieving a healthier balance between work and play.

But how have the manufacturers of these dreamy alternative holiday homes coped with the demand, how are the holiday parks that sell them being impacted, is it all positive gains, or does trouble bubble beneath the surface? 

For Mr & Mrs Simmons, the COVID-19 lockdowns were, as for many, a time to reflect on their personal values and goals. Now enjoying retirement, one particular aspect of Mr & Mrs Simmons’ lives that brought them great pleasure and happiness, was their holiday home in North Wales.

“In 2011 we bought our first static caravan at Sarnfaen Holiday Park, in Tal-y-bont near Barmouth.  It was a good choice of caravan and an excellent choice of site.  The staff at Sarnfaen, (General Manager Debbie, Park Manager Llinos and colleagues) have always been friendly, helpful, efficient and fair,” reveal Mr & Mrs Simmons.

Reflecting on their decision to upgrade their original holiday home at Sarnfaen, they explain, “During lockdown we thought hard about updating the caravan, and following research online and viewing a number of caravans, eventually decided upon a model from one of the major manufacturers.

“We were advised by the [manufacturer’s] sales representative that the cost of the 2022 model would be the 2021 RRP, plus 5%.

“Being happy with our choice of caravan, and content with the 5% increase, we agreed a part exchange deal with Debbie at Sarnfaen, and paid a deposit of £5K, on 1^st May 2021.”

At the time, Mr & Mrs Simmons were aware of the increased demand for holiday homes, spurred by the uncertainty of foreign travel and a boom in UK staycations. The production of static caravans & lodges was generally behind schedule, as a result of factory closures caused by lockdowns & employees contracting the highly contagious virus.

The current lead time for new units from this manufacturer was around 9 months, and all parties understood that the new caravan would be a 2022 model, scheduled for production and delivery around February 2022. The manufacturer also advised a change in colour to the kitchen units from the 2021 model to the updated 2022 model.

Just over a month after entering into a purchase agreement, Mr & Mrs Simmons were advised by the manufacturer of further delays expected with production & delivery of their chosen holiday home, as well as considerable changes to the interior of the 2022 model they been sold.

They describe the changes, which included, “Replacement of both sofas, lounge chair, stool, fireplace, carpet, curtains, and replacement of 3 lounge curtains with venetian blinds,” the first they‘d heard about any such modifications.

Receiving an invitation to view a demo version of the 2022 model, Mr & Mrs Simmons had their first glimpse of what was to be their new holiday home in July. They recall, “We still loved the layout and were happy with the kitchen, bedrooms and bathrooms.”

However, as the couple did not like the new changes made to the lounge, it was eventually agreed with the manufacturer, via the holiday park, that Mr & Mrs Simmons would provide all their own lounge furniture and curtains etc., at a slight reduction in cost. A new contract provided by the manufacturer was signed in August.

Within this new contract Mr & Mrs Simmons state, “it was clear that our previously paid deposit was non-refundable. We therefore assumed that a binding contract was now in place regarding the specification and that the cost was now fixed” and under this assumption, they proceeded to purchase the furnishings required to complete their new holiday home.

When their holiday home finally arrived in July 2022, over one full year since the purchase was made, the colour of all the internal doors had been changed unannounced. Only shortly before delivery was made, Mr & Mrs Simmons had also been told that the fireplace would be the same from the 2021 model, rather than the promised updated 2022 version.

What the customers also didn’t yet know, was that the final bill for this compromised model had also changed, and significantly. It had actually increased close to 25% on the RRP of the 2021 model, which had formed the basis of the sales agreement made in May the previous year, and substantially more than the 5% increase proposed by the manufacturer. 

Mr & Mrs Simmons elaborate, “During the summer of 2022 we were asked to attend a meeting with Debbie and Llinos, during which they explained that the cost of the caravan to Sarnfaen had increased several times, and significantly, even after February 2022 when the caravan should have been delivered. 

“Very honourably they said that Sarnfaen would not pass on any of the additional cost to us, but would keep to our agreement of 1st May 2021.

Commenting on the manufacturer, Mr & Mrs Simmons assert, “It seems to us both unfair and unreasonable that having taken a non-returnable deposit, this manufacturer can change the specification and price completely at their own discretion.”

When asked how issues such as these have impacted the business, Sarnfaen Holiday Park stated, “Sometimes we lose the trust or interest of the customer, who understandably feels put off by the supplier issues and we ultimately lose the sale; where we’ve absorbed price increases our commission and sales profits have been compromised; and waiting with empty plots on significant delays of up to 2 years has lost us pitch fees.

“Our biggest concern is that our customer relationships get damaged by these issues, which are generally out of our control. Thankfully our customers, such as Mr & Mrs Simmons, have been extremely patient and understanding of the situation, and in fact by being transparent and working through the challenge together, our relationship has strengthened and hopefully they feel assured that we truly care about their best interests and creating a long-term relationship.”

Sarnfaen and her sister holiday park Madryn Castle are owned and operated by Pritchard Leisure, a small family-run enterprise based in North Wales. Pritchard Leisure’s management team explain that worryingly, this type of situation is common within the Holiday & Leisure Park industry, and happens openly.

They elaborate, “We’ve been to a number of industry conferences and trade shows these past few months, where we met other small & medium independent holiday park businesses, who have been treated in much the same way; by some of the biggest and best-known manufacturers in our industry. They are equally concerned that this type of behaviour is so poorly regulated against and can happen so blatantly, and that the only viable recourse for SME’s in our position is formal legal proceedings, for which the costs would far outweigh any potential compensation.”

In their opinion, industry regulations and standards shield manufacturers, and the end-customer is protected by consumer rights laws. This means that holiday parks, who essentially act as agents for holiday home sale transactions, are the ones being made to suffer.

Pritchard Leisure continue to explain, “This is not an isolated incident either. This particular manufacturer, with whom we have built a good relationship with over many years, and deal with directly rather than through a dealership, imposed significant increases on multiple units over the course of 2021 and 2022, some as high as 40% above our original agreement.

“What troubled us deeply is how we were treated, and the lack of transparency and support from the manufacturer. It was as though when the pandemic came and the demand for their holiday homes skyrocketed, we became insignificant and our relationship suddenly ended. We also felt we were being purposefully kept in the dark to hide the disorganisation and deception that was occurring behind the scenes.

“There were a few units, including that of Mr & Mrs Simmons, where after continuous delays and no real clarity when production was due, we would be suddenly notified that the units were due for immediate build and that delivery would be within a matter of weeks.

“Final prices were often withheld until the very last minute, which felt like a tactic to avoid us cancelling our orders, due to the unreasonable and unforeseen price increases.

“We actually escalated our concerns about price increases to the company’s Managing Director on a couple of occasions. He responded with a 7-day ultimatum that we must either accept the price increase or cancel the order, despite knowing we had already sold these units to customers as much as a year before this time.”

Pritchard Leisure have shared what they call an ‘ambiguous and unethical’ clause, written into this manufacturer’s purchase agreements, and quoted by the Managing Director when defending his position on the drastic price increases, it reads: “Whilst every effort is to maintain the prices in normal circumstances the price is that ruling at the date of delivery”.

They reason that given the manufacturer is taking orders up to 3 years ahead of production, this does not provide sufficient clarity and gives the manufacturer power to price units however they wish at the time of delivery. They also explain how this clause is used to supersede the previously made suggestions of more reasonable price increases between 3.5 – 5%.

“With the many known challenges facing the economy and production of goods, we were fully understanding and expecting reasonable increases. In many cases we were forecasting our sales prices with security buffers of up to 10%, despite first being told by manufacturers that increases would not exceed 3.5%, which changed mid-2021 to a maximum of 5%.

“What we find interesting, is that if you look at the sales contracts between us and the manufacturers, you will see the terms and price increase suggestions changing as the year progresses, and the statements became more ambiguous and offer less clarity.

Pritchard Leisure ordered around 25 units in total between 2021 & 2022, spread among different suppliers, “We have paid surcharges and price increases on almost every unit we ordered since early 2021, mostly at a loss to ourselves. Many of these units had been pledged to new customers, and others were upgrades for existing customers.”

Pritchard Leisure conclude, “We know many other holiday parks and customers here in the UK have endured similar situations, especially among smaller independently owned parks. We lie in the shadows of the big-branded corporate park-consortiums, who ensure a steady flow of business to these suppliers.

“There appears to be something of a reluctance within our industry to speak out against this type of behaviour, as ultimately, we feel we rely upon the big manufacturers to supply the holiday homes that customers favour, to site on our parks. But in truth there are plenty of alternative suppliers to choose from, especially since the rise in smaller construction businesses offering innovative & stylish glamping pods and bespoke modular units.

“We are extremely grateful that Mr & Mrs Simmons wanted to bring this story into the public domain, and we feel both obliged and encouraged to share the truth about these experiences.

“We see this behaviour as bullyish and short-sighted, and our response is to be more careful with who we choose to work with. We will use our purchasing power and only develop relationships with suppliers that share our values, and who we feel truly care about their customers, not just their bottom line - and thankfully they still exist.”