RISING fuel prices pose a major threat to Australia's caravan parks and camping grounds, according to an industry risk report.

And it warns that the number of parks will continue to fall as the valuable land is converted to more profitable uses such as hotels and resorts.

The predictions come in a new 22-page overview of operational risks associated with the industry, published by leading business information analysts IBISWorld.

The Caravan Parks and Camping Grounds in Australia - Industry Risk Rating Report admits that with many parks able to be leased, barriers to entering the industry are minimal and this offered a quick and relatively more affordable method of entry.

In addition, there were no formal qualifications required to operate in the industry which, it says, is in a growth phase of its life cycle as it continues to benefit from rising domestic tourism and increasing international visitor arrivals.

"While the total number of industry establishments is falling, this has largely been among the long-term resident caravan parks (more than three months stay and sometimes used as permanent residence), rather than those designed for shorter staying tourists and visitors," the report points out.

"The number of backpackers both from international visitors and Australian residents is continuing to grow and this industry can directly compete with hostels for a share of this market."

There was also an increasing preference of some tourists to book into cabins, on-site caravans and units in caravan parks/camping grounds that provided basic facilities such as a kitchenettes and separate bathrooms.

"The range, standard and quality of facilities at holiday parks of varying tariff levels have increased significantly over time," the report continues.

"Caravan parks have also moved into providing higher quality facilities with on-site cabins for guests to overcome the seasonal use of parks and grounds.

"This also helps to attract wider markets, usually at more attractive tariffs than for local motels.

"The industry continues to benefit from increasing sales of caravans and RVs, some of which are for touring while others are used on a permanent site in a park."

The report refers to another important factor contributing to the growth of the caravan and camping industry ... the baby boomer generation which is now reaching retirement age.

"The first babies of this generation will reach 65 years of age in 2011 and many now have the available income and leisure time to tour around Australia and to make use of caravan parks and camping grounds," it added.

The report also includes sections which analyse the industry's recent growth, predicted growth, risks and internal competition.

For more information or to purchase a copy of the Caravan Parks and Camping Grounds in Australia - Industry Risk Rating Report, click here.