Simon Foster, director of Commercial Heritage, Savills, looks at how owners of historic houses and rural estates might maximise their revenue streams.
The national contribution of historic houses – economically, culturally, socially and through education – is enormous. Of 1,550 Historic Houses Association (HHA) houses and gardens, nearly 60% open their doors to the public, welcoming 13m visitors a year. They are key drivers for tourism and economic activity, often in remote rural areas where there are few alternatives.
These special places are also central to our local identity, character, history and life. More than half of HHA houses host and support charitable and community events. They are embedded in their local communities and economies. However, these are very uncertain times for historic houses and gardens. Competition to attract visitors with reduced disposable incomes has increased; at the same time, costs have also risen. The legislative and tax framework for private owners is tougher and the challenges are considerable. Many historic house businesses face threats to their very survival.
Yet all is not lost. Over the last 50 years or so historic houses throughout the UK have found creative ways to generate income to supplement traditional estate activities such as farming, forestry, game shooting and property lettings. Historic houses such as Chatsworth, Blenheim Palace and Leeds Castle attract many hundreds of thousands of visitors each year and are among some of Britain’s most popular tourist attractions. Hundreds more owners do the same, but on a much smaller scale.
In recent years, these houses have also become popular venues for weddings, parties and corporate events and any spare capacity is often filled with other activities such as film, TV and photographic location work. The most commercially minded owners and managers are developing their businesses to maximise revenue: their properties are expensive places to maintain. However, it is not easy to run a profitable historic house business.
A music festival in the park, for example, can produce as much, if not more, income than six months’ of visitor opening
The impact of commercial activity inside the house can be significant. Not only do hoards of visitors and high-spirited wedding guests cause wear and tear on the delicate fabric of the house but life for the family living there can be challenging. Savills has clients who have been woken in the night to find a disorientated and inebriated wedding guest standing at the end of their bed! It’s sometimes hard to see the funny side.
It’s not surprising, therefore, that many owners have looked for alternative ways to generate significant income by allowing public access to their rural estates. A music festival in the park, for example, can produce as much, if not more, income than six months’ of visitor opening while a well-conceived glamping enterprise can produce a healthy financial return from a relatively small capital investment. In both cases, these enterprises can be managed at arm’s length, with limited financial risk and virtually no impact on family life in the main house.
Large outdoor events, such as festivals, concerts, country fairs and ‘Tough Mudder’ type endurance runs, for example, are good income generators for both the estate and the local economy. Regional accommodation providers and suppliers of essential services, such as portable loos, skips and generators, will benefit from the arrival of a major new event. A high profile function can also help raise the profile of a rural estate and provide it with national recognition. Savills’ clients at Eastnor Castle, Herefordshire, for example, recognise that their brand awareness was significantly enhanced when The Big Chill music festival moved to the estate over 10 years ago.
Of course there are downsides too. A large, outdoor event can be very disruptive to local residents: increased noise and traffic may be a problem. It is essential that landowners and event promoters do everything possible to keep local residents informed and limit the impingement. Recent wet summers have also had an impact. The intense activity during set up and clear up can cause damage to the event site if the weather is bad. The ground usually recovers over time but disrupted sward can cause major headaches if it is in sight of the following weekend’s wedding guests.
Most of Savills’ clients prefer a relatively risk-free approach to outdoor events and promote their estates via external promoters who take the financial risk and pay the landowner a fixed venue fee or share of ticket revenue. While this is clearly much less risky than paying for and promoting one’s own events (Goodwood’s Festival of Speed and Revival are good examples of how to do it well) landowners need to ensure that the event and promoter are reputable and that any association will enhance the profile of the estate as a whole. They also need to ensure that they have a robust agreement to protect them from cancellation and potential breaches of the agreement terms.
In many cases historic houses are increasingly seen as the backdrop to other commercial activities. Even the larger stately homes cannot rely solely on visitors to the house. The most successful historic houses create a visitor destination that is more than just the house but also the events held in its grounds.
About the Author
Simon Foster is the director of Commercial Heritage at Savills, a special property service providing strategic, commercial and practical advice to owners, trustees and managers in the historic house and rural estates sectors. His team has experience in tourism, events and leisure including outdoor events, weddings and receptions, camping, glamping and caravanning enterprises as well as event management and contract negotiation. www.savills.co.uk/services
A quick Q&A with Edward Barham, owner of Hole Park in Rolvenden, Kent.
Hole Park is a 2,500 acre estate with 200 acres of classic parkland in the Weald of Kent and has been owned by the Barham family for the past four generations. Attracting visitors to its gardens, which are a mix of formal design and more naturalised planting, the house itself remains a private family home and therefore not open to the public. Hole Park holds several events throughout the year including the Hole Park Cross Duathlons (a combination of running and mountain biking); the Dirty Dozen Races (races incorporating obstacles, and always lots of mud); Invasion Kent, Napoleonic battle re-enactments, the Wealden Times Midsummer Fair; and the Kent Game and Country Fair, as well as many caravan and camping rallies. www.holepark.com
Why did you decide to hold events at Hole Park?
The down turn in the fortunes of agriculture forces all dynamic landowners to look at other ways of earning money from their land. Being blessed with an attractive 200 acre parkland, and in an area that is short of venues to host outdoor events, once we had attracted one fair here, others organisers noted that and have beaten a path to our door.
Are there any events that you wouldn’t consider holding?
I prefer events when the public go home at 1800 (6 o’clock) and then we can relax. We have never yet had a music festival and I am quite keen not to do so on hearing what goes on from my children. Equally the litter can become a very real problem at such events, I am told. We have trouble enough with it at our more sedate ones!
Do you arrange any of your own events or use outside event companies?
Predominantly we provide the venue as Licensor and leave the organisation of the often specialist event to the Licensee to put on the fair or event that they want. By this means my financial exposure is limited and it avoids considerable cash outlay perhaps risking using skills I do not have! I am also sure that the events are much better run and more varied because of this decision. That said we are promoting an event in association with the Napoleonic Association this year, which will see us acting as the organiser and promoter. This is a first for us
Do you hire the venue for a flat fee or take a cut of the ticket sales?
Usually a flat fee. We have tried base fees plus headage but I find it unreliable and a cause for ill feeling; have they declared the correct number and why does it perhaps not tally with what we have been able to glean from the gate men on the day?
What challenges have you faced?
Weather of course. So much is at stake, financially and with exhibitor and visitor expectation, that it can be a very hard to make a decision to cancel. Once the event is underway the Licensee takes on that role and as they all have safety officers, they make the call to close any dangerous part, such as an unsecure tent in high wind which happened one year. On another occasion we faced a showground with water standing in every divot and pot hole. We should have cancelled but I didn’t want to make that call for the reasons just given. I stood and looked at it, found I was not brave enough and went to a meeting in London for the day. The wind blew, the sun came out and the event was saved!
What % of total estate revenue is attributed to the events you host?
No precise figure here but a rapidly rising contribution to the estate’s overall profitability. From agriculture that might achieve a rent of £120 an acre with some additional environmental payments, we now have income many times that, and there is still space and time for the farming to continue.
What extra maintenance do you need to do to the estate to hold these events?
The infrastructure is always being updated and improved; water supplies, additional hard standing, tree planting as well as additional grassland maintenance. But the overall cost of these is not large and they are used by many events over a long period.
How was the experience with the local authority in regard to planning?
We do not host enough events to trigger a planning issue. Oddly the parkland is divided between two local authorities by quirk of a boundary. At times we are not sure who to speak to! Of equal importance to planning is the licensing. Ensuring we have enough TEN’s (Temporary Event Notices, which particularly apply to sale of alcohol) between the several users can be testing.
Any advice for other country house / estate owners thinking about holding events in their grounds?
We are the fortunate owners of some of the most beautiful countryside in the UK, often with very expensive-to-run-houses as the centrepiece. You cannot sit and expect life owes you a living and every aspect of a diversified estate has to be made to pay its way. Hole Park has gone down the route of outdoor events because that suites us; there are alternatives but whatever you do, do something, not nothing, and do it well.