Leisure attractions
Source: gov.uk (2025-04-28)

This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.

1. Scope

A leisure attraction can be defined as “A place that people visit for pleasure and interest, often while they are on holiday.” This section applies to a variety of leisure attraction premises to include, but not exclusively, Tourist Attractions, Farm Attractions, Model Villages, Pitch and Putt Golf Courses, Lakes with Watersports Facilities, Miniature Railways, War Games Courses/Miscellaneous Agricultural Use, Theme Parks, Agricultural Showgrounds, Aquaria, Heritage Railways, Pleasure Piers, Bird Sanctuaries, Zoos and Safari Parks, as well as Miscellaneous Leisure.

Although Section 1085 of the Rating Manual encompasses a wide range of leisure attractions, some of the above attractions have their own specific sections in the Rating Manual and individual Practice Notes. Where this is the case reference should be made to those along with Section 1085.

2. List description and special category code

There are various categories of property which are covered under the overall umbrella of leisure attractions, which all have separate descriptions and codes as listed below:

Tourist attractions:

List description xxxx and Premises - The description should suit the activity. Primary Description Code: LX SCAT code: 284, suffix S. This is a specialist class of property to be valued by Valuers in the National Valuation Unit.

Farm attractions:

List description: farm leisure attraction or farm park and premises, including (part exempt) where appropriate.

Primary description code: LX

SCAT code: 284, suffix S.

(The Scat code of 284 has been used to include both Tourist Attractions / Dark Rides and Farm Attractions but reference should be made to their separate sections within the Rating Manual as regards the valuation of each).

This is a specialist class of property to be valued by Valuers in the National Valuation Unit.

See valuation guidance in Rating Manual: section 6 part 3 valuation of all property classes - section 385 farm diversification (https://www.gov.uk/guidance/rating-manual-section-6-part-3-valuation-of-all-property-classes/section-385-farm-diversification) (VOA - Section 385: farm diversification)

Model villages:

List description: model village and premises

Primary Description Code: LX

SCAT code: 188, suffix G

This is a generalist class of property to be valued by Valuers in each Regional Valuation Unit and overseen by the Regional Leisure Attractions CCT.

Amusement parks:

List description: amusement park and premises

Primary Description Code: LT4

SCAT code: 012, suffix S.

This is a specialist class of property to be valued by Valuers in the National Valuation Unit.

See valuation guidance in Rating Manual: section 6 part 3 - section 70 amusement parks and theme parks (https://www.gov.uk/guidance/rating-manual-section-6-part-3-valuation-of-all-property-classes/section-70-amusement-parks-and-theme-parks).

Pitch and putt golf courses:

List description: pitch and putt course and premises

Primary Description Code: LX

SCAT code: 426, suffix G.

This is a generalist class. of property to be valued by Valuers in each Regional Valuation Unit and overseen by the Regional Leisure Attractions CCT.

Lakes with watersport facilities:

List description: xxxx and premises. The description should suit the activity

Primary Description Code: LX

SCAT code: 145, suffix S.

This is a specialist class of property to be valued by the National Valuation Unit and overseen by the Specialist Leisure Attractions CCT.

Fully commercial occupations, such as dive lakes or lakes where the operator provides water sports as a commercial activity are covered by this section and the associated Practice Note. This class will also cover a variety of sports clubs where the sporting activity is water based and the hereditament includes the lake or an exclusive right to use the lake for the pertinent sport in addition to the buildings. This will include sailing, rowing and water ski clubs. These types of typically non-commercial occupation are covered in Rating Manual: section 6 part 3 - section 970: sports grounds (https://www.gov.uk/guidance/rating-manual-section-6-part-3-valuation-of-all-property-classes/section-970-sports-grounds).

Miniature railways:

List description: miniature railway and premises

Primary Description Code: LX

SCAT code: 421, suffix G.

This is a generalist class of property to be valued by Valuers in each Regional Valuation Unit and overseen by the Regional Leisure Attractions CCT.

War games courses/ miscellaneous agricultural use:

List description; xxxx and Premises - The description should suit the activity

Primary Description Code: LX

SCAT code: 296, suffix G

This is a generalist class of property. to be valued by Valuers in each Regional Valuation Unit and overseen by the Regional Leisure Attractions CCT.

See valuation guidance in Rating Manual: section 6 part 3 - section 385 farm diversification (https://www.gov.uk/guidance/rating-manual-section-6-part-3-valuation-of-all-property-classes/section-385-farm-diversification).

Theme parks:

List description: theme park and premises

Primary Description Code: LX

SCAT code: 280, suffix N

This is a national class of property dealt with by the National Valuation Unit.

See valuation guidance in Rating Manual: section 6 part 3 - section 70 amusement parks and theme parks (https://www.gov.uk/guidance/rating-manual-section-6-part-3-valuation-of-all-property-classes/section-70-amusement-parks-and-theme-parks).

Agricultural showgrounds:

List description: agricultural showground and premises

Primary Description Code: MX

SCAT code: 004, suffix S/N.

This is a specialist class of property to be valued by Valuers in the National Valuation Unit

See valuation guidance in Rating Manual: section 6 part 3 - section 40 agricultural showgrounds (https://www.gov.uk/guidance/rating-manual-section-6-part-3-valuation-of-all-property-classes/section-40-agricultural-showgrounds).

Aquaria:

List description: aquarium and premises

Primary Description Code: MX

SCAT code: 403, suffix S

This is a specialist class. of property to be valued by the National Valuation Unit and overseen by the Specialist Leisure Attractions CCT.

See valuation guidance in Rating Manual: section 6 part 3 - section 75 aquaria (https://www.gov.uk/guidance/rating-manual-section-6-part-3-valuation-of-all-property-classes/section-75-aquaria).

Heritage railways:

List description: heritage railway and premises

Primary Description Code: LX

SCAT code: 128, suffix S

This is a specialist class. of property to be valued by the National Valuation Unit and overseen by the Specialist Leisure Attractions CCT. See valuation guidance in Rating Manual: section 6 part 3 - section 477 heritage railways (https://www.gov.uk/guidance/rating-manual-section-6-part-3-valuation-of-all-property-classes/section-477-heritage-railways).

Pleasure piers:

List description: pleasure pier and premises

Primary Description Code: LX

SCAT code: 213, suffix S

This is a specialist class. of property to be valued by the National

Valuation Unit and overseen by the Regional Leisure Attrac tions CCT.

See valuation guidance in Rating Manual: section 6 part 3 - section 790 pleasure piers (https://www.gov.uk/guidance/rating-manual-section-6-part-3-valuation-of-all-property-classes/section-790-pleasure-piers).

Zoos and safari parks:

List description: zoo/safari park and premises

Primary Description Code: LX

SCAT code: 304, suffix S

This is a specialist class. of property to be valued by the National Valuation Unit and overseen by the Specialist Leisure Attractions CCT.

See valuation guidance in Rating Manual: section 6 part 3 - section 1130 zoos and safari parks (https://www.gov.uk/guidance/rating-manual-section-6-part-3-valuation-of-all-property-classes/section-1130-zoos-and-safari-parks).

Bird sanctuary:

List description: the description should suit the actual use of the property.

Primary Description Code: MX

SCAT code; 026, suffix G

This is a generalist class of property. to be valued by Valuers in each Regional Valuation Unit and overseen by the Regional Leisure Attractions CCT.

See valuation guidance in Rating Manual: section 6 part 3 - section 122 bird sanctuaries (https://www.gov.uk/guidance/rating-manual-section-6-part-3-valuation-of-all-property-classes/section-122-bird-sanctuaries).

Point-to-point:

List description: point to point racecourse and premises, including (part exempt) where appropriate.

Primary Description Code: LX

SCAT code; 214, suffix G

This is a generalist class of property. to be valued by Valuers in each Regional Valuation Unit and overseen by the Regional Leisure Attractions CCT.

See valuation guidance in Rating Manual: section 6 part 3 section 795 point-to-point race meetings (https://www.gov.uk/guidance/rating-manual-section-6-part-3-valuation-of-all-property-classes/section-795-point-to-point-race-courses).

Miscellaneous leisure:

List description: the description should suit the activity.

Primary Description Code: LX

SCAT code: 993, suffix S/G

This is a split class of property with Valuers in the National Valuation Unit valuing the more complex and larger properties.

3. Responsible teams

Paragraph 2 above details the team/s responsible for each of the classes covered by this section.

4. Co-ordination

The Specialist Leisure Attractions Class Co-ordination team has overall responsibility for the co-ordination of these classes. The team is responsible for the approach to and accuracy and consistency of valuations. The team will deliver Practice Notes describing the valuation basis for revaluation and provide advice as necessary during the life of the rating lists. Caseworkers have a responsibility to:
- follow the advice given at all times
- not depart from the guidance given on appeals or maintenance work, without approval from the co-ordination team
- seek advice from the co-ordination team before starting any new work
5. Legal framework

The description of “Leisure Attraction” covers a wide spectrum of properties. No specific restrictions are believed to exist for the general property class, however, the following legal factors, which may be more specific to certain individual classes need to be considered. If relevant, they may have a significant effect on income and/or expenses.

The minimum wage – many tourist attractions employ casual labour, students etc. Wage costs have risen significantly with increases in the minimum wage.

Health and safety/insurance – all sites open to the public are likely to have increased costs arising out of the increasingly stringent Health and Safety requirements, such as regular independent inspections, and the high level of insurance premiums. Those more potentially hazardous sites involving machinery and working parks e.g. theme parks, amusement parks etc. are likely to have been impacted more in this respect than the more tranquil style of tourist attraction.

Disability Discrimination Act 1995 – this is a concern for any facility open to the public, but is more likely to involve increased capital costs and consultants’ fees for new ventures in building or converting premises.

6. Survey requirements

The majority of valuations for leisure attractions will be undertaken by reference to trading receipts. In order to understand the extent and nature of activities to be included in the valuation it is essential that a site plan is provided which details all the features of the property.

Any buildings will need to be fully referenced and measured to GEA/NIA (subject to use) in accordance with the VOA Code of Measuring Practice for Rating Purposes.

7. Survey capture

In all cases plans and surveys should be stored in the property folder of the Electronic Document Records Management (EDRM) system.

8. Valuation approach

8.1.1. Rental method

Where rental information is available it needs to be carefully examined to ensure that it is an arm’s length transaction and accords with the requirements of rateable value or can be sensibly adjusted to so accord. Frequently lettings are between connected parties and are simply accounting transactions. They can also often disregard substantial tenants improvements, which will necessitate considerable adjustment. Any analysis of such rents will, therefore, need to be treated with caution.

If possible, the adjusted rent should be tested against a receipts and expenditure analysis, and the resultant valuation expressed in terms of a percentage of gross receipts. Comparison with the analysis outcomes from other similar such hereditaments should be undertaken as a further check.

8.1.2. Gross receipts

Where there is no reliable rental evidence but it can be discerned that the intention to trade profitably is the prime motive of occupation then a valuation based on the accounts will be the best starting point. Full copies of audited accounts for at least 3 years prior to the date of valuation should be requested. This approach is the preferred method in respect of larger “one-off” attractions, particularly Theme Parks. Guidance as to the analysis of accounts is provided in Rating Manual: section 4 part 2 - the receipts and expenditure method.

Over several rating lists, receipts based valuations have been accepted as being appropriate for this class. A comparative valuation approach (percentage of gross receipts) has been adopted in most cases, and is applicable where full and detailed accounts are not provided. Where they are made available, a full receipts and expenditure valuation should be undertaken, particularly where there is insufficient rental evidence.

Although the tenant’s share may be regarded as the first charge upon the divisible balance, it does not follow that the landlord’s position should be ignored. In determining the tenant’s share, and hence the RV, the relative negotiating strengths of the two (willing) parties, the business risks in the enterprise and the quantum of their respective investments will be relevant.

The hypothetical landlord will have invested significant capital in the property, and will expect an adequate return. Where there is insufficient profit available for both the tenant and landlord to achieve their desired level of return a compromise will be required.

As with other forms of valuation, it is necessary to “stand back and look” at the final figure and consider whether in all the circumstances it correctly shows the rent which would be paid under the statutory terms. In certain cases, a full receipts and expenditure valuation may produce a NIL result or a very low figure, which manifestly cannot reflect the letting value of the attraction. In such an instance, for the very best reason that the answer produced cannot be right, the full receipts and expenditure valuation might properly be rejected in favour of an approach based upon a percentage of gross receipts. An increasing number of the lower value leisure attractions are hobby or second income based activities. In the case of a hobby interest, the motivation of the operator is not necessarily to be commercially viable, but to share their personal interest with a wider public and to mitigate the costs and at least in part help fund their hobby.

The case of Rank Organisation Ltd v Billett (VO) 1958 R&IT 650, concerned the valuation of a cinema, which was operating at a loss. There it was held appropriate to adopt a percentage of gross receipts to derive the bid of the hypothetical tenant - the basis being that the actual tenant holding on in hope of better times could be considered as the hypothetical tenant, and as he was probably the only possible tenant, the assessment would be the rent he would pay.

Farm based attractions, however, can present many problems in undertaking a full receipts and expenditure valuation. The tourist attraction element is often based around pre-existing and surplus ex-farm buildings and the land is already in occupation and use of the operator. Areas of the land often have dual agricultural and diversification use. Frequently there is only a single set of accounts to cover all the operations. Even where the tourist attraction has separate accounts, the expenditure adjustments will prove difficult as machinery (for example tractors etc.) and even other staff may be “borrowed” from the agricultural enterprise as required. (See also Rating Manual: section 6 part 3 - section 385 farm diversification (https://www.gov.uk/guidance/rating-manual-section-6-part-3-valuation-of-all-property-classes/section-385-farm-diversification)).

Where full accounts are not available valuations should be as a percentage of Gross Receipts (net of VAT) with concession income being valued separately (see 8.3). The appropriate yield should ideally be taken from local comparable evidence but see the relevant practice note for further guidance.

The adopted Gross Receipts should be that which would have been agreed between the parties as at AVD, looking forward and taking into account perceived trends, risks and uncertainties at that date. Care should be taken in considering abnormal years’ trade due to weather, two Easter holidays falling within the year or other local circumstances.

Where gross receipts for the year prior to AVD are not available, then a judgement will have to be made having regard to as many as possible of the following:

(a) any historic turnover figures available, together with knowledge of other similar attractions and the likely movement in gross receipts to AVD

(b) estimated gross receipts - tourist board reports usually include a list of the main attractions and visitor numbers over recent years, for various attractions. Coupled with a recent brochure or knowledge of entrance fees it is possible to produce a reasonable estimate based on visitor numbers and a perceived average spend. Care must be taken if adopting this approach, as published visitor numbers may include parties of schoolchildren admitted free or at reduced rates and there will generally be income streams from such other sources as shops cafes and specific rides which would not be shown in the entrance fee. There may also be separate concessions.

(c) Published sources for visitor information to attractions which contain annual visitor numbers for the year of publication and preceding years, together with current ticket prices.

(d) a comparison with assessments of similarly trading properties.

8.2 Valuation considerations

8.2.1. Tenant’s capital/risk

In order to consider the rental percentage bid for any property type it is necessary to have regard to:

(a). the amount of tenant’s capital required to provide all those elements of non-rateable equipment, rides, animals etc., coupled with

(b). the operational risk, in particular the degree of competition faced within the particular catchment area.

8.2.2. Fixed costs

For a lot of attractions, costs are largely fixed, and even quite significant differences in visitor numbers will only have a marginal effect on costs. Thus, whilst increased visitor numbers may require a few additional staff on the gate or in the café, such additional costs are marginal, and once receipts have reached the “break even” point, profitability can increase rapidly. Conversely, even quite a small fall in visitor numbers can have a marked impact on profitability.

It is thus too simplistic to say that all attractions within a certain type should be valued at the same percentage, since profitability will vary disproportionately to the variation in gross receipts.

8.3 Licences, let outs and concessions

There is an increasing trend for occupiers to grant licences for concessions. Most commonly this would involve the cafeteria, ice cream sales or shop/fast food outlets and in the case of larger amusement/theme parks, to companies specialising in the provision of amusement facilities. It is essential to establish who is in paramount control of the various parts of the property and to determine the extent of the hereditament(s).

Where the let out is a separate hereditament the rent or licence fee, etc., should not be included in the gross income to avoid double counting, unless ability to pay is being considered.

Where a concession remains part of the attraction hereditament, rental or licence fees should be treated separately from the trading turnover of the attraction. This concession income can be treated in a number of ways:

(a). Concession income can be grossed up to reflect the concessionaire’s operating costs (let-outs are often based on a percentage of gross receipts), then added to the main turnover. The resultant gross turnover, of the whole, can then be more easily compared with that of other operators, who may run catering, retail, etc. in-house. Similarly, income from other years can be compared on a like for like basis, even if the position regarding concessions has changed over time.

(b). Where gross turnover, of the whole, has been calculated as above, a full R&E valuation can be carried out, since expenses incurred in repairing, maintaining, insuring, heating, lighting and servicing the let out area or building will normally be included within the fixed or variable costs of the “host” hereditament.

(c). Where gross turnover of the concession is not known, but the hypothetical tenant is responsible for provision and maintenance of the facility from which the concession holder trades, the concession income is thus a “below the line” payment to the hypothetical tenant and should be added to the divisible balance resulting from a full receipts and expenditure valuation of the “host” hereditament, to produce the overall RV.

(d). Where the valuation is carried out on the basis of a percentage of gross receipts and the concession remains part of the hereditament, rental or licence payments should be considered separately from the trading turnover. Concession income should be valued at a percentage within the range of 25% – 50% depending on the level of the occupier’s expenditure. This will be at the higher end where receipts involve the landlord in minimal expense, and at the lower end where the rateable occupier is responsible for all repairing liabilities, provision of services or significant non-rateable items. The resultant figure should then be added to the rateable value calculated for the main part of the hereditament.

9. Valuation support

All valuations should be entered onto the Non-Bulk Server (NBS) under the relevant Scat Code.

Additional support is available through:
- Survaid
- Class Co-ordination team for Leisure Attractions
Appendix 1: Gardens open to the public

This appendix is to give guidance on the approach to the assessment and valuation of gardens open to the public.

The majority of gardens will fall into one of the categories below:

i) Display gardens - usually occupied by organisations promoting horticulture, or other aspects of botany, such as the Royal Horticultural Society (RHS), Garden Organic and garden plant societies. It will include arboreta. They may be composite hereditaments but only insofar as there is ancillary gardeners’ or caretakers’ housing occupied as a condition of employment.

ii) Gardens established for many years, often formerly occupied with a large mansion house but now a separate occupation. Occupiers will include The National Trust (NT), charitable trusts and other similar bodies. (For the assessment of gardens in the occupation of the NT, English Heritage and other large gardens of national importance please also see RM Section 6 Part 3: S1000). These may be composite hereditaments where there is ancillary gardeners’ or caretakers’ accommodation.

iii) Those gardens forming the grounds or setting of a larger non-domestic hereditament, e.g. the gardens of a headquarters office, research facility, nursing home etc. Where a charge is made for access to the garden and it is not used in connection with the occupation of the building consideration should be given to separately assessing the garden within the parameters of rating law and practice.

iv) Gardens occupied with an historic property which is also open to the public; it may be possible to visit each part separately. The historic property may also be used as a venue for conferences, weddings and other functions. Where the garden is occupied with an historic house used in part as a residence it will be a composite hereditament.

v) Gardens, sometimes small, open to the public but occupied with houses of all types and sizes which are not open to the public. These gardens are often a hobby; they will invariably be occupied by private individuals. These will be either composite or entirely domestic hereditaments (see below).

Referencing Details Required

a. Details of all non-domestic activities carried out within the hereditament should be recorded. These may include B&B or self-catering lets and, most commonly, shop, catering and plant sales.

b. Full details of opening times and charges should be recorded.

c. A brochure, or leaflet, showing details of the garden should be obtained.

d. Visitor numbers and receipts (net of VAT) should be obtained. Where elements of the site are franchised out (most frequently the café) it is important to ascertain the rent passing and what facilities/repairs/services (gas, electric etc) and non-rateable chattels are included in the rent.

e. To gain an appreciation of the associated costs where possible a copy of the relevant accounts should be requested. Details of the number of staff (full and part-time) employed and their duties should be requested. Brief details of any volunteer staff should also be obtained.

f. If the occupier is a registered charity does it have a trading company and what parts does that trading company occupy – usually shops, cafes and plant sales. Details of the arrangements on which the trading company occupies these parts should be sought.

g. The extent and nature of structural adaptations to the property to facilitate public access. For the smaller trading properties (where there is no distinct shop/café/plant sales areas) adaptations may still exist in the form of toilet facilities (perhaps specialist disabled toilets) and car parking facilities. Details of any domestic use of these parts should be obtained. The position and extent of facilities for visitors should be recorded on an extract of an OS plan which should also show the extent of the property open to the public.

h. Inheritance Tax – is the property opening to the public to satisfy the conditions of a grant award or tax relief. Is the sole reason for opening the property to the public to satisfy the terms of grant or relief.

i. Historic trading levels - the general trend for private properties and gardens is that visitor numbers have been in decline in recent years. Thus it is useful to gain as much information as possible on historic trading and the trend in visitor numbers.

j. Web sites – these are extremely useful in capturing basic information, but not as a replacement for an actual site inspection. Web sites rarely under describe the facilities and quite commonly subsequent detailed discussions show that the actual property and number of visitors is rather different than the impression given on the web site.

Rateability

Gardens in categories i) to iii) above will be rateable. Category iv) will in most cases be rateable, regard should be had to the comments in RM Section 6 Part 3: s1000 paragraphs 5 and 7.

For the remainder each case must be considered on its facts, having regard to the degree of occupation, use and physical adaptations. General guidance is given below; no single test should be applied in isolation, rather it is an overall view of the nature and physical characteristics of the property. Each case will rest on its own facts:

Adaptations and physical alterations – as a generality it should be taken that where there are physical adaptations to the property to facilitate public access, then an entry in the non domestic rating list will be required. Potentially the only exception could be where physical adaptations have taken place, but the subsequent trading has proven the property to be unviable and the current trading level represents a de minimis use. Where there is any doubt the valuer should consult with the relevant Technical Adviser or SRU specialist. Gardens with no physical adaptations and open only under the “yellow book” charity scheme for a few days a year are an example of the type that will satisfy a de minimis test and require no list entry.

The definition of domestic property under S66 (1)(b) of the Local Government Finance Act 1988 includes a garden ‘belonging to or enjoyed with’ living accommodation.

Where only the garden is open to the public it is likely that there would have to be very considerable use of the garden for non-domestic purposes before the total hereditament could be considered composite. This is because the enjoyment of the house is less disturbed by affording the public access to merely the garden and there are no facilities primarily there for the benefit of visitors. The point at which the use of the garden is so intense as to cease being ‘enjoyed with’, or the facilities provided for visitors can no longer be described as purely incidental to opening up a domestic garden to the public, will be a matter of fact and degree in each case.

Gardens may range from a small suburban garden to an extensive garden attached to a Stately Home or Country House of many acres. Each case will be likely to turn on its own facts. Where the degree of commercial use is felt to be more than what can be considered de minimis, full details as to the opening times, the nature, scale and extent of facilities provided, and the estimated number of visitors should be obtained and the matter referred to CEO for advice.
- In considering whether the non domestic use is de minimis in respect of properties with no physical adaptation, regard should be had to the:
a. Number of days per annum open to the public. As a general guide, less than 20 days would point towards a de minimis use, whereas over 20 days is likely to be rateable.

b. Level of visitor numbers and Fair Maintainable Trade.

c. Degree of advertising/promotion.

d. Intention of the occupiers – that is to say, are they seeking to achieve the highest possible trade in mitigation of their costs, or is the purpose more philanthropic or a desire to share their garden.

e. The occupant’s use of the garden for domestic purposes; where this is the dominant use and the non-domestic use and adaptation is minor then it is likely that the property will be domestic only and not a composite.

Description

The entry in the Rating List should have the description “Garden (open to the public)” or “Garden and premises (open to the public)”.

Practice note 1: 2023 - leisure attractions

1. Market Appraisal

1.1 Over time, tastes and expectations have changed. In essence many tourists and visitors are no longer prepared to merely stand and look at something for entertainment, they require a much higher level of stimulation and “hands-on” activities.

1.2 Funding availability through lottery funding have also changed the dynamics of the leisure industry particularly in the usual tourist locations. Whilst Lottery funding is only available for capital expenditure, this has encouraged development of new leisure facilities and improvement of existing facilities. However, sometimes capital grant provision has created a facility which has not been able to develop the necessary critical mass of visitor numbers and annual income to sustain itself.

1.3 Many operators have responded to these changes in customer expectations by offering new technology in terms of interactive rides and games, laser shooting etc., and have often done well as a result. Conversely, some of the more traditional attractions, such as bird gardens, model villages and show caves, are in relative decline as they have not moved with the times.

1.4 There are also examples of operators who have incorrectly identified the changing demands of the public, and in attempting to maintain visitor numbers have branched out into additional facilities, which do not appeal to their core visitor market. Consequently, they have increased costs, without achieving the expected increase in revenue.

1.5 The 12 months leading up to Antecedent Valuation Date (AVD), 1 April 2021, was dominated by the COVID19 pandemic. However, this market appraisal reflects the whole period since April 2015.

1.6 The two leading leisure associations representing the most iconic, popular, and important leisure attractions in the UK such as museums, galleries, palaces, castles, cathedrals, zoos, historic houses, heritage sites, gardens etc., published the following information in relation to UK Tourism statistics for 2019:
- The tourism industry is responsible for around 4 million jobs, making up around 12% of all UK jobs.
- Supporting local economies across the UK, tourism is worth £237 billion, equivalent to 10.9% of UK Gross Domestic Product.
- UK residents taking day trips were worth £63.7 billion in 2018 (equating to 1.7-billion-day trips).
- An additional £24.7 billion is from UK residents staying on a UK bound tourism trip overnight (totalling 122.8 million overnight trips). This compares to 40.9 billion trips from all international tourists, spending £28.4 billion.
- Visitor figures to the UK for 2019 saw an increase of 3.6% on 2018 visits
- Scotland saw the biggest increase of 17%, Wales 6.8% and England 1.7% compared to 2018.
- Visitor Attraction Figures for England for 2019 showed a 3% visitor increase on 2018, slightly higher than the 2% increase recorded in each of the previous 4 years.
- Visitor Attractions for Wales for 2018 showed 22.2 million visits, 61% to free attractions, 39% to paid attractions.
2. Changes from the last Practice Note

2.1 With the exception of the market appraisal, there are no significant changes from the 2017 Practice Note.

3. Ratepayer Discussions

3.1 No discussions have taken place with representatives of the industry.

4. Valuation Scheme

4.1. Rental Method

4.1.1 Rents, where available, will provide useful evidence of value, but can often disregard substantial tenant’s improvements, necessitating considerable adjustment. Any analysis of such rents will, therefore, need to be treated with caution.

4.1.2 If possible, the adjusted rent should be tested against a receipts and expenditure valuation, and the resultant valuation expressed in terms of a percentage of gross receipts to facilitate comparison with the assessments of similar hereditaments.

4.2. Accounts Information

4.2.1 When accounts are available it is essential that information is provided for at least three years prior to the Antecedent Valuation Date. This will then give a comprehensive guide as to past trading achievements, identify any trend and enable the fair maintainable trade to be estimated. The rental bid of the hypothetical tenant at the AVD can then be derived and will take into account likely future levels of receipts and expenditure.

4.2.2 The tenant’s rental bid, and hence the quantum of the tenant’s share, will be affected by the type of hereditament, the degree of profit foreseen in the coming year, the likelihood of profits rising or falling, the degree to which they are likely to rise or fall and the time period before they do.

4.3. Comparative Approach

4.3.1 In the absence of rental or full accounts information, tourist and visitor attractions should be valued on the comparative approach, by reference to a percentage of fair maintainable trade, net of VAT. With concession income either grossed up to reflect the concessionaire’s operating costs, then added to the main turnover and a single percentage applied to the whole, or valued separately in the range of 25% - 50%, with the resultant figure added to that attributed to the main property, to produce the overall RV.

4.3.2 The possibility of a high repair and maintenance liability may have a significant effect on value, and accordingly the rent. Regard should be had to the Rating (Valuation) Act 1999 and the assumption that the hereditament is in a state of reasonable repair, but excluding from this assumption any repairs that a reasonable landlord would consider uneconomic. For guidance see Rating Manual Section 3 Part 6 - Disrepair practice note 1- Rating (Valuation) Act 1999.

4.3.3 The effects of the COVID-19 outbreak need to be taken into account as they would have been anticipated by the parties at the AVD. Trade evidence that includes long periods of lockdowns is unlikely to provide good evidence of the FMT at the AVD. Valuers are advised to take as their starting point the closest reliable trade, which is likely to be the 2019/2020 trading year (ending March or before) and any previous trading years.

Having established the likely FMT for the 19/20 trading year (ending March or before), the valuer should then consider any further adjustments needed to reflect the receipts envisaged as at 1 April 2021. The reasonable efficient operator will take a view, not only on the trade immediately achievable at AVD, but the trade over a period of time ahead, as they are assumed to be taking a tenancy with a reasonable prospect of continuance.

Analysis of the available evidence indicates that bid ranges in each class of property have changed very little from those adopted for the 2017 Rating Lists, although there may be significant changes to individual properties. Inflation from April 2015 to April 2019 shows an increase of 12.7%. If income and expenses both increase by 12.7%, then profitability (as a percentage margin) will remain the same, but rental value can still be higher in absolute terms as there is more profit in absolute terms. In the event of the same split of the divisible balance being adopted, the RV will increase. The valuer needs to take particular care when applying the shortened method where receipts have not kept pace with expenses and therefore the percentage adopted may have to be adjusted downwards to reflect this. The opposite clearly applies in the event of the reverse.

4.3.4 As a generality, the following percentage ranges should apply:

4.3.5 In order to more easily compare like with like, the valuation should typically be expressed as set out in the example below:

4.3.6 Care should be taken not to rigidly apply a percentage bid to any class of property, e.g. valuing all bird gardens @ 5%. Tourist and visitor attractions have largely fixed costs and once the “break even” point has been reached profitability will increase significantly, over even marginal increases in turnover.

4.3.7 There will be occasions where the bid will fall outside the ranges suggested in paragraph above:
- Very low profitability/turnover properties, it is recommended that no lower than 3.5% be adopted for valuation purposes unless in exceptional circumstances.
- Properties where the operator is providing very little in the way of facilities or infrastructure and have low maintenance costs e.g. charging for access to a scenic viewing platform. Here a significantly higher percentage than indicated in the above scale may be appropriate.
Before adopting a bid outside the normal range, valuers should consult with their Class Co-ordination Team member from their Unit.

4.3.8 Where these more unusual properties are identified more information should be sought to cross check the valuation, possibly to the extent of seeking audited accounts and undertaking a full receipts and expenditure valuation.

Practice note 2: 2023 - lakes with water sports

1. Market appraisal

1.1 There are a limited number of leisure lakes operated on a fully commercial basis in England and Wales.

1.2 This practice note provides more background with regard to dive lakes and/or lakes where the operator provides water sports as a commercial activity.

1.3 Lakes used as dive lakes have specific characteristics including: a good depth of water, non-silty floor to give clear water providing good visibility, reasonable site access, and items of interest for divers to explore such as specimen fish, helicopter/aircraft wrecks, vehicles and old buildings.

1.4 Commercially operated sites for both dive lakes and those offering water sports vary in size and facilities. Some have basic, minimal shore facilities whilst other offer a comprehensive range of shore facilities including changing rooms, WC and shower rooms, booking-in office, bar, cafe, shop, meeting/training rooms and air refill facilities. Sites that provide training will often have ‘classrooms’ and in some instances provide basic short-stay accommodation. The facilities offered on each site will be reflected in the charges levied and the income received.

1.5 Whilst all sites are subject to general health and safety requirements, unless under instruction, individuals including divers use the lakes at their own risk. Thus, providing a site is not operating negligently, the operator does not have a responsibility for safety in the water. Nevertheless, the more developed sites will usually provide first aid facilities as well as having staff fully trained in resuscitation and drowning first aid.

1.6 According to the Watersports Participation survey, there has been a modest increase in the number of people participating in water sports across the UK year on year with a shift away from the original seasonal participation. There are reports of growth in the number of people taking part in kite surfing, stand up paddle boarding, kayaking, bodysurfing and surfing. Paddle boarding has shown the greatest growth which has offset the small dip in canoeists and kayakers.

2. Changes from the last practice note

2.1 There have been no changes to the practice note from the previous 2017 Rating List covering these facilities.

3. Ratepayer discussions

3.1 None at present.

4. Valuation scheme

4.1 The general guidance provided in practice note 1 will apply.

4.2 With hereditaments of this nature there may be occasions where there is more than one user of the same land and buildings. In these instances the Supreme Court decision of Cardtronics UK Ltd and others v Sykes and others (Valuation Officers) [2020] UKSC 21 should assist in helping identify the rateable occupier who is in paramount control.

4.3 It is important to note when considering the valuation for dive lakes that a major element of income is derived from diving courses. Care needs to be exercised to ensure all this element of income is correctly captured as often the lake facility only provides the location with either the operator providing the instruction under a different company and/or outside instructors paying for use of the lake on which they teach their course.

Practice note 1: 2017 - leisure attractions

1. Market appraisal

1.1 Background

Over time, tastes and expectations have changed. In essence many tourists and visitors are no longer prepared to merely stand and look at something for entertainment, they require a much higher level of stimulation and “hands-on” activities.

Funding availability through the National Lottery and Heritage Lottery have also changed the dynamics of the leisure industry particularly in the usual tourist locations. Whilst Lottery funding is only available for capital expenditure, this has encouraged development of new leisure facilities and improvement of existing facilities. However at times such capital grant provision has created a facility which has not been able to develop the necessary critical mass of visitor numbers and annual income to sustain itself.

Many operators have responded to these changes in customer expectations by offering new technology in terms of interactive rides and games, laser shooting etc., and have often done well as a result. Conversely, some of the more traditional attractions, such as bird gardens, model villages and show caves, which have not moved with the times are in relative decline.

There are also examples of operators who have incorrectly identified the changing demands of the public, and in an attempt to maintain visitor numbers have branched out into additional facilities, which do not appeal to their core visitor market. Consequently, they have increased costs, without achieving the expected increase in revenue.

1.2 Latest Statistics

The British Association of Leisure Parks, Piers and Attractions (BALPPA) has published the following information in relation to UK Tourism Statistics -

Tourism not only provides fun and entertainment for visitors but is vital to the UK economy. The tourism sector is predicted to grow at 3.8% until 2014, faster than the UK’s overall predicted annual growth.

BALPPA speaks for over 300 visitor attractions – including iconic attractions such as the London Eye, Blackpool Pleasure Beach, Madame Tussauds, Alton Towers and Thorpe Park – and ultimately for many millions of customers every year.

Key UK Tourism Statistics:

The tourism industry is responsible for over 3 million jobs, making up 9.6% of all UK jobs.

Tourism is currently worth £126 billion, equivalent to 9% of UK GDP.

UK residents taking day trips is worth £57 billion in 2013 (equating to 1.4 billion day trips)

An additional £24 billion is from UK residents staying on a UK bound tourism trip overnight (totalling 101.8 million overnight trips).

This compares to 18.5 billion trips from all international tourists, both from the EU and from further afield.

The Association of Leading Visitor Attractions (ALVA) currently has 57 members and reported in March 2015 that its members’ visitor figures for 2014 had seen an average increase of 6.5% on the previous year. Scottish attractions had the greatest increase of almost 10% increase, followed by London with an increase of 7.1%.

2. Changes from the last Practice Note

There are no changes from the broad principles followed for the 2010 Rating Lists and the approach therefore is the same.

3. Ratepayer Discussions

None at present.

4. Valuation Scheme

4.1. Rental Method

Rents, where available, will provide useful evidence of value, but can often disregard substantial tenant’s improvements, necessitating considerable adjustment. Any analysis of such rents will, therefore, need to be treated with caution.

If possible, the adjusted rent should be tested against a receipts and expenditure valuation, and the resultant valuation expressed in terms of a percentage of gross receipts to facilitate comparison with the assessments of similar hereditaments.

4.2. Accounts Information

When accounts are available it is essential that information is provided for at least three years prior to the Antecedent Valuation Date. This will then give a comprehensive guide as to past trading achievements, identify any trend and enable the fair maintainable trade to be estimated. The rental bid of the hypothetical tenant at the AVD can then be derived and will take into account likely future levels of receipts and expenditure.

The tenant’s rental bid, and hence the quantum of the tenant’s share, will be affected by the type of hereditament, the degree of profit foreseen in the coming year, the likelihood of profits rising or falling, the degree to which they are likely to rise or fall and the time period before they do.

4.3. Comparative Approach

In the absence of rental or full accounts information, tourist and visitor attractions should be valued on the comparative approach, by reference to a percentage of Fair Maintainable Trade, net of VAT. With concession income either grossed up to reflect the concessionaire’s operating costs, then added to the main turnover and a single percentage applied to the whole, or valued separately in the range of 25% - 50%, with the resultant figure added to that attributed to the main property, to produce the overall RV.

Analysis of the available evidence indicates that bid ranges in each class of property have changed very little from those adopted for the 2010 Rating Lists, although there may be significant changes to individual properties. The RPI from April 2008 to April 2015 shows an increase of some 20%, which would imply that an attraction will need to have increased receipts by a similar percentage to have “stood still” in terms of profitability. In fact, bearing in mind the increased cost possibilities discussed at paragraph 5 of the main Rating Manual Section, for many properties the turnover will need to have increased in excess of this RPI average for profitability (and rental bid) to have remained the same. This needs to be borne in mind when considering the percentage to be applied to gross receipts for 2017. If gross turnover has increased, unless profitability has also increased, it is unlikely to be appropriate to apply the same percentage to gross receipts as for 2010.

As a generality, the following percentage ranges should apply:-

In order to more easily compare like with like the valuation should typically be expressed as set out in the example below:

Care should be taken not to rigidly apply a percentage bid to any class of property – e.g. valuing all bird gardens @ 5%. Tourist and visitor attractions have largely fixed costs and once the “break even” point has been reached profitability will increase significantly, over even marginal increases in turnover.

There will be occasions where the bid will fall outside the ranges suggested above:-

Very low profitability/turnover properties - it is recommended that no lower than 3.5% be adopted for valuation purposes unless in exceptional circumstances.

Properties where the operator is providing very little in the way of facilities or infrastructure, and have low maintenance costs e.g. charging for access to a scenic viewing platform. Here a significantly higher percentage than indicated in the above scale may be appropriate.

Before adopting a bid outside the norm range, caseworkers should consult with their Class Co-ordination Team member.

Where these more unusual properties are identified more information should be sought to cross check the valuation, possibly to the extent of seeking audited accounts and undertaking a full receipts and expenditure valuation.

Practice note 2: 2017 - lake with water sport facilities

1. Market Appraisal

There are a limited number of leisure lakes operated on a fully commercial basis. The general guidance provided in Practice Note 1 will apply. This Practice Note provides more background with regard to one particular type of user - dive lakes. Lakes suitable for this use have specific characteristics including: a good depth of water, non-silty floor to give clear water providing good visibility, reasonable site access, and items of interest for divers to explore such as specimen fish, helicopter/aircraft wrecks, vehicles and old buildings.

Commercially operated sites vary from the basic with limited shore facilities to a comprehensive range of shore facilities including changing rooms, WC and shower rooms, booking-in office, bar, cafe, shop, meeting/training rooms and air refill facilities. Sites that provide training will often have ‘classrooms’ and in some instances provide basic short-stay accommodation. The lack of some of these facilities is not necessarily an indicator of a disability as the extent of features and facilities will be reflected in the charges levied and the income received.

Whilst all sites are subject to general health and safety requirements, unless under instruction, individuals including divers use the lakes at their own risk. Thus, providing a site is not operating negligently, the operator does not have a responsibility for safety in the water. Nevertheless, the more developed sites will usually provide first aid facilities as well as having staff fully trained in resuscitation and drowning first aid.

2. Changes from the last Practice Note

There was no specific Practice Note for the 2010 Rating Lists covering these facilities.

3. Ratepayer Discussions

None at present.

4. Valuation Scheme

A major element of income for dive lake sites comes from diving courses. Care needs to be exercised to ensure all this element of income is correctly captured as often the lake facility only provides the location with either the operator providing the instruction under a different company and/or outside instructors paying for use of the lake on which they teach their course.

Low turnover sites; those with an annual turnover, net of VAT, of £75,000 pa or less, will tend to have more basic facilities. Whilst that may suggest a lower profitability, fixed operating costs will be lower and hence profitability may even be higher. From the analysis of actual accounts it is clear that the percentage range between sites with basic facilities and those with a range of facilities is quite narrow.

Valuation guidance on this class for 2017 is contained within Rating Manual Section 6 - Part 3 - Section 1085 : Leisure Attractions: Practice Note 1 : 2017. However, the analysis of available accounts indicates that a return of 6 - 7% on the net of VAT turnover is appropriate for commercial dive lakes.