Roger, Neil and Lynda Perkins first diversified into the holiday market in 1996 when part of the farmhouse at Dinas Island Farm was converted for letting out to visitors.
“It was the year of BSE and farm incomes were down so the prospect of generating extra income from the house was appealing,” says Roger.
The house had been built in two sections so was perfectly placed for this diversification. The landlord, the National Trust, had renovated the entire farmhouse and the property was big enough to divide for holiday letting.
“We installed a double door to divide the two parts of the house and I put in a kitchen at my own expense,” says Roger. The result was a two-bedroom cottage.
Buoyed by the success of the enterprise, the family explored the possibility of converting some of the farmyard barns, but the chief stumbling block was that the farm was a tenanted holding.
“Because we don’t own the property we couldn’t get funding. It is difficult to borrow money to do up someone else’s property,” says Roger.
However, an opportunity to expand the holiday enterprise came when the family bought the nearby Hendre Farm in 1999. This included an old farmhouse at the back of the main house, which Roger moved to when Neil and Lynda married.
This was converted and opened as holiday accommodation in 2003. “We completely gutted it, investing £30,000 in the project,” says Roger.
Next to be converted were three stone barns in the farmyard and the business continued to grow so that there are now five cottages with beds for 31 people.
The Perkins have invested a total of £230,000 in the venture. After mortgage and other costs are deducted, this part of the business earns £30,000 a year, representing a 13% return on investment.
Finance has been through a 20-year mortgage. “We debated whether to finance it through a 10-year mortgage and plough everything we earned into it or to pay it back over 20 years and have a bit of an income from it,” says Roger.
“One family thought the drench gun was an actual gun and that we were shooting the lambs. All the images on television were of dead livestock and in their minds every farmer was shooting animals.”
“Neil had come home to farm at the time so we thought the best option would be to get an income from it. The aim is to generate two income streams so that if the next generation wants to farm, the farm won’t have to support three generations.”
The accommodation and the farm are run as separate enterprises but complement one another. Each is profitable but has supported the other at different times.
“When we built a new shed on the farm a couple of years ago it wouldn’t have made sense to borrow money from the bank to fund it when the cottages were making a profit. Each business loans to the other and it is repaid in the same way as a bank loan would be,” says Neil.
Roger takes the main responsibility for the holiday lets but is helped by daughter-in-law, Lynda. “It took some getting used to when we went down the holiday route. Neil has had to get used to not having me around on Fridays and Saturdays because those are our changeover days,” says Roger.
“It is a huge commitment. There might be a wedding or an event on a Saturday but we still have to do the cottages.”
The farm and the cottages are mostly busy at different times although lambing is a challenging period, especially if it overlaps with Easter.
Lynda cooks meals, cakes and bread for the cottages and this has proved a big selling point. A range of shepherd’s pies and lamb and leek gratins are made with home-produced lamb, with all the meals covered by the Pembrokeshire Produce Mark.
“Our visitors like to buy meals for the day they arrive and many often take one home with them,” says Lynda. “The meals go into the cottages frozen or chilled but the campers at our campsite have them hot.
“There is so much competition in this business that you have got to have a point of difference. We often get calls from people staying in other cottages asking to buy food. We don’t supply them but I send them a menu and suggest that they stay with us next time!”
The provision of food keeps the taxman happy too. Adding value to a holiday let is proof that a property is being run as a business and not a second home.
“We provide more of a serviced holiday, supplying linen and towels, a meet-and-greet service and be there to answer questions and help visitors through their holiday,” says Roger.
“We are fortunate to be in a position to show people the true face of farming, people often come here with pre-formed ideas.”
During foot-and-mouth, shearing and drenching sheep was taking place while visitors were on the farm. “One family thought the drench gun was an actual gun and that we were shooting the lambs. All the images on television were of dead livestock and in their minds every farmer was shooting animals,” says Roger.
“They pleaded with us to stop but we were able to show them what we were actually doing and explain why it needed to be done.”
Some of the properties have to be vacant for six weeks a year because the planning permission granted was not for full-time occupancy. They are kept empty in January and February. Temporary occupancy doesn’t apply to the converted farmhouse at Hendre so this is let on a short-term winter tenancy. “It keeps the house aired and generates a bit of an income for the winter,” says Roger.
Until two years ago, the five cottages were occupied for 146 weeks a year but bookings have dropped off, possibly because of the downturn in the economy or a succession of poor summers. However the family is confident for the future.
“We have to be proactive and that is why we have launched our own websites,” Neil explained. “As with farming, the holiday business has its peaks and troughs. It is five years since the country started panicking about the recession and we are now getting the aftershock. Hopefully in five years’ time we will get bumper years.”
|Dinas Island – lamb growth and sales|
|Grass growth has been exceptional this year although at 12%, dry matter levels are far lower than last year’s 25%. This has impacted on lamb growth. |
“The lambs are looking OK, their frames have grown, but they need to put on some flesh which they will hopefully do this autumn,” says Neil.
A third of the flock has been sold so far. The first group averaged 21kg deadweight at £4.20/kg and the second, the pre-weaning draft, averaged 17.5kg at £3.95/kg. This represents an average price of £70 a lamb.
The farm has also welcomed visitors from the British Grassland Society this summer with 160 people coming to scrutinise the system. “The plus side of all the rain was that the farm was looking very green.”
See our other reports from the Perkins’ farm