Opportunities and risk

A close up of plants and tree trunks in the forest



We take a proactive approach to managing opportunity and risk. Long-term strategic opportunities are reviewed by the Board on a yearly basis, while short-term opportunities are reviewed on an ongoing basis.

The Risk Committee meets quarterly to oversee risk management arrangements, review risks facing the business, and ensure appropriate processes are in place to mitigate potential risks and uncertainties. They notify the Board of any changes in the status and control of risks, as well as reviewing and challenging key risk registers and reports from other committees.

The Risk Committee is chaired by the Chief Executive Officer and attended by the Chief Financial Officer, the Operating Board and other appropriate senior management.

Opportunity and risk are also considered by the Safety Management Committee, the Competition Committee, and the Data Protection Governance Committee.

There are many potential risks and uncertainties which could have a material impact on our performance and the execution of our growth strategy. These include, but are not limited to:

Health and safety

The health, safety and welfare of our guests and colleagues is paramount. We are committed to maintaining industry-leading standards in health and safety, including fire and food safety, and we adopt a proactive approach to safety management. All incidents are recorded and reviewed to monitor trends and capture learning points, which are then integrated into the business. The Safety Management Committee reviews major incidents and is focused on continuous improvement to mitigate risk.

Business continuity

We operate five villages in the UK and one village in Ireland, and a significant interruption of any one would have a material impact on the business. As a result, the Risk Committee supervises comprehensive risk management arrangements, including business continuity plans which are regularly tested with the support of external specialists. These arrangements are supported by a broad insurance programme. 

Supply chain

We have a large number of suppliers and pride ourselves on the quality of our product. The business could be adversely affected by a fall in the standard of goods or services supplied by third parties or by a failure of a key partner. Quality risks are mitigated by robust supplier registration systems, with food and safety further supported by independent advisors. In addition, the Risk Committee considers supply chain contingency arrangements and takes appropriate measures to mitigate risk.

Contractual arrangements

We have contracts with third parties for the supply of goods and services. Contracts are negotiated at arm’s length, and we do not enter into contracts that are outside the ordinary course of business or those which contain onerous terms. We maintain a compliance programme for all material contractual commitments. There is no single contractual counterparty that is critical to the running of the business. The failure of any critical contractual counterparty is managed through supply chain contingency arrangements.


Our performance depends largely on our colleagues, both on our villages and at Head Office. The resignation of key individuals or the inability to recruit colleagues with the right experience and skills could adversely impact our results. To mitigate these issues, we have invested in training programmes and have a number of bonus schemes, linked to the business’ results and guest satisfaction, that are designed to reward and retain individuals.

Input price increases

The business’ margin could be adversely affected by an increase in the price of key costs including, but not limited to, wages, overheads, and utilities. We take proactive steps to manage any such increases, including cost control, forward buying and budgeting for any increase.


The Center Parcs brand could be adversely affected by a serious incident, accident or similar occurrence, or a slow decline in the brand’s appeal to consumers. We mitigate this risk by maintaining industry-leading health and safety systems and standards of training. The risk of a slow decline in the brand’s appeal is managed through continuous product investment and innovation, marketing campaigns and brand development.


Risk of fraud exists in misappropriation of assets, including banking, theft of stock and theft of cash takings. We mitigate this risk through the management structure and regular financial reviews with, and extensive use of, business systems. In addition, our internal audit function undertakes regular reviews of financial controls. We are also subject to regular external audits.

Climate transition

Whilst we are committed to operating in a sustainable and ethical way, failure to adhere to government climate change regulations could impact our operational performance and our ability to meet our strategic targets. This risk has been included in our corporate risk register, together with the mitigating controls.

Climate physical risks

Whilst we are committed to operating in a sustainable and ethical way, failure to reduce our impact on the environment, climate change and nature loss could impact our reputation, ability to attract investment and ability to meet our strategic targets.

General economic conditions

The disposable income of our guests and/or their holiday preferences are affected by changes in the general economic environment, and this may result in a fall in the number of guests and/or a decrease in on-village expenditure. We regularly review our product offering and engage with guests to ensure we provide value for money to meet their needs.


To date, the UK’s formal exit from the European Union has not had a material impact on the business. However, we continue to monitor political and economic developments and have plans in place for all eventualities.


The Center Parcs brand is synonymous with high-quality short breaks in a forest environment, but we compete for the discretionary expenditure of potential guests, who could choose to take short breaks at other destinations or participate in other recreational activities. This risk is mitigated by the strength of the Center Parcs brand and continual investment in accommodation and central facilities (including retail outlets and restaurants), coupled with innovation amongst the leisure activities and the responsiveness to guest surveys.

Seasonality and weather

Demand for short breaks is influenced by the main holiday periods at Easter, in the summer holidays and the Christmas/New Year period. This risk is mitigated by online dynamic pricing which encourages demand outside of peak periods. The accommodation is located within forest environments and a significant number of activities take place outdoors. Therefore, demand may be impacted by the prevailing weather. This risk is minimal as guests tend not to book on impulse and most breaks and activities are booked in advance. Additionally, we maintain diversity between our indoor and outdoor activities to mitigate this risk.

The Directors and senior managers regularly review the financial requirements of the business and the associated risks. We do not use complicated financial instruments and, where financial instruments are used, they are used to reduce interest rate risk. We do not hold financial instruments for trading purposes. We finance our operations through a mixture of retained earnings and borrowings as required. Historically, Center Parcs has sought to reduce its cost of capital by refinancing and restructuring the business’ funding using the underlying asset value.

All tranches of the Group’s secured debt are subject to financial covenants. The Directors have assessed future compliance and, at this time, do not foresee any breach of the financial covenants.

A covenant waiver is currently in place and, as a result, the testing of the Class A and Class B notes was waived for the financial covenant test dates falling in August 2020, February 2021 and August 2021. For the February 2022 date, Free Cash Flow will be amended so that if any of the UK villages are closed during the relevant testing period as a result of measures implemented by the Group in response to any COVID-19 related (or other) pandemic, the Group will be allowed to add equity proceeds received by the UK Group during the testing period to EBITDA in order to pass the financial covenant test.

Interest rate risk

Principal sources of borrowing in the UK are fixed interest rate loan notes. The principal source of borrowing in Ireland is a floating rate loan facility provided by a syndicate of banks.

Liquidity risk

We maintain sufficient levels of cash and committed funding to enable us to meet our medium-term working capital, lease liability and funding obligations. Rolling forecasts of liquidity requirements are prepared and monitored, and surplus cash is invested in interest-bearing accounts.

Currency risk

Wherever possible, the UK business enters into supply contracts denominated in Sterling and the Irish business enters into supply contracts denominated in Euro. We do not operate a hedging facility to manage currency risk as it is not considered to be material.

Credit risk

Cash balances are held on deposit with several UK banking institutions. Credit risk in respect of revenue streams is limited, as most customers pay in advance.

Financial reporting risk

Our financial systems are required to process many transactions securely and accurately. Any weaknesses in the systems could result in the incorrect reporting of financial results and covenant compliance. This risk is mitigated by the production of detailed management accounts, which are regularly compared to budgets and forecasts. Center Parcs is also subject to an annual external audit.


Board governance 

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Financial reporting & controls

Lodges and trees overlooking a lake

Regulatory compliance

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