For decades it was famous for contests to find the knobbliest knees and most glamorous grandmothers. But in recent years visitors to Britain’s best-known holiday camps have been more likely to drink champagne and luxuriate in spas. (The grannies were dispatched long ago, along with fluorescent yellow plastic palm trees.)

Now, as it eyes a potential market among the growing numbers of families wanting to holiday in the UK as a result of a weak pound, Butlin’s is preparing to make the biggest investment in its 83-year history and position itself as a rival to upmarket family holiday giant Center Parcs.

Its Bognor Regis resort – like all the other Butlin’s destinations, its status has been upgraded from a mere “camp” – is to open a £40m pool complex next month featuring 6,300 square metres of waves and waterslides. “This isn’t something you do every day,” said Jon Hendry-Pickup, Butlin’s new managing director and the former boss of the Italian restaurant chain Prezzo.

Designers approached parenting website Mumsnet, he said, for a list of “must-have” family features, from underfloor heating in the changing rooms and special areas for toddlers to outdoor gardens and eco lighting. The result, the company hopes, will cement a “reputational reboot” that has seen it fight off what Hendry-Pickup calls misconceptions about Butlin’s traditionally cheap and cheerful image.

“It’s a challenge, but I think the bigger challenge would be if people didn’t know who the brand was,” he said.

A ‘glamorous granny’ contest in 1982. Photograph: Barry Lewis/In Pictures via Getty Images

Xanna Chown, editor at a London-based publisher and mother of two, would agree. She said her young children loved their Bognor Regis holiday so much that the family went back for Christmas. “It’s a revelation,” she said. “You go there a bit trepidatious. But it’s really lovely – just like going to a nice beauty salon.”

Others admit that the snobbery that has dogged Butlin’s for decades refuses to go away. “When Felicity’s talking about her half-term skiing trip and so-and-so has been to the Bahamas, you just don’t want to throw it in there, ‘Well, I went to Butlin’s’,” said Antonia McCaffrey from Thames Ditton in Surrey. Her family first visited more than a decade ago but left a day early because it felt “like staying in an army barracks”. But when they returned years later the place was transformed and they enjoyed it, she said, even though “it still felt a bit like being in a noisy playgroup”.

Hendry-Pickup said that customers would make up their own minds when they saw the resorts in Skegness, Bognor and Minehead, which have collectively welcomed more than a million guests in the past year.

“The best way that we can manage it is to say that Butlin’s is much more than you’d expect,” he said.

Knobbly knees contests? That was something that happened years and years ago Jon Hendry-Pickup, Butlins MD

Some things haven’t changed. The Redcoats are still there, and so too are the 80s tribute bands and slot machines for the children. But millions of pounds has been invested in building green play areas and spruced-up accommodation.

The entertainment, too, has shifted upmarket – with big names including Nick Cave and Madness.

And while £883 for an Easter break for a family of four isn’t as cheap as camping, it can compare favourably with a week at the Spanish seaside.

“Who isn’t looking for value for money? Everyone is,” said Hendry-Pickup.

He said he didn’t want to change the core customers of a brand originally created as an affordable break for the working class.

But he added that Billy Butlin, who created the holiday camps in 1936 and turned them into a multimillion-pound industry, never designed them to be “cheap holidays”. What he wanted was for Butlin’s to be “accessible for everyone”, he said.

But one thing that definitely won’t be coming back, according to Hendry-Pickup – knobbly knees contests: “That was something that happened years and years ago.”