3 years ago I wrote what I had hoped would be the first part of a blog on how to start a chalet business in the Alps. It was in response to an upturn in enquiries for that type of property. As usual I got sidetracked and never wrote pt 2. I never felt the need. My blogs are always written in reaction to something and the enquiries tailed off. It turned out that the upturn in interest was short lived.

fermehautschoseaux_2

The image above is Ferme Hauts Choseaux, 7 bedrooms, 595,000€

The subject came up again last week as I was contacted by a researcher from ITV . She is doing a feasibility study for doing a program that will follow a "life changer" that wants to run a chalet. She needed to know how many of these enquiries we get, per year. To give them an idea of how long they will have to wait for a suitable person to become available.

I explained that we now get a more diverse range of life changers. People wanting to work from home, work from Geneva, people offering services to the local community. It's more than just people wanting to run a chalet. It's funny because that is exactly what I was advising in part 1! This new wave are looking for a family home, generally a more modest property than the traditional catered chalet and almost certainly in one of the cheaper outlying villages. The centre of the resorts are too costly for anyone other than those looking for a business opportunity.

I sent the question out to some of our agents. One of them pointed out that there are some brakes on the whole business plan. The ski client is more demanding than 10 years ago. Their accommodation has to be in the right place, the standard they demand has gone up, home cooking isn't the thing anymore, it's all chefs, sauna's and luxury. Put all this together and you need a lot more money available to buy something that is up to the standard. This is the first thing that has made the process much harder.

I'm not saying that there is less demand. There isn't, there is still plenty of demand for catered holidays. It's just that the demographic of the skier on a catered chalet holiday has changed. They are no longer the ones that want to run a small chalet business. Those skiers are now staying in self-catering properties and from their point of view a rental business somehow seems less accessible.

I did a straw poll amongst our agents, here are some quotes.

"I can think of one or two this year, but none that have actually taken the plunge, it seems like that those thinking about it were considering the catered chalet option as one of a variety of "career" options. I think plenty of people still have the desire to come and live here, just that not many of them want to run catered chalets (or they realise there isn't the market). And people are (trying) to be a bit more original! Working from home, sports coaching, life coaching, transport, tradesmen, property development and even "professional" jobs like doctors, architects etc."

"Many of the catered chalet owners in my area are actually trying to sell. My experience with clients is very similar to the other agents."

"I agree, and actually all the 'life-changers' I know are also moving out of the chalet business....."

If after reading this you are still looking for something that might work as a catered chalet option then take a look at our website. The "sweet spot" for this type of enquiry is a chalet with 5 or more bedrooms, priced between 450,000 and 700,000 euros. We currently have 10 for sale, 3 of which are on a ski bus route.

 

 

Posted on by Gareth Jefferies

7 Responses to Chalet Business in the Alps pt 2

  1. Dee says:


    So why the demise in catered chalet demand?
    Cost of renting for vacations?
    Bad early season for 4th yr running?
    Self catering more popular?
    Too much competition?
    Interested to hear your views
    Thanks


    • Gareth Jefferies says:


      I have edited the article slightly, mainly to make the point that there is still a good demand for catered chalet holidays. The point I am trying to make is that there is less demand from people wanting to run a catered chalet business. My guesses being…the cost of a catered chalet holiday has gone up, the people going on these holidays are now less likely to consider the idea of running a holiday themselves. The type of live changer who might consider this future are now taking self-catered holidays. Sure, there is lots of competition. That won’t help. There are still the same numbers skiing though, skier days as measured by the ski lift operators is fairly stable. The difficult early season often translates into a better end of season. So basically the people who want to go skiing will do, at some point.


  2. RO says:


    hi! In response, a quick bio – I was a nurse, husband was a technical theatre manager, 2005 we jumped ship to live the dream, bought a pub, 2 years later sold it having dug it out of a hole, then bought another, then recession hit. What followed was 5 years of trying to survive. 2012 we managed to sell it having taken a massive loss, bought an RV and embarked on a “mid life gap year” touring europe. We got as far as our first ski season and never left. We had skied before but never done a chalet holiday, and found ourselves running a 28 bedder as chef and host managers. We returned 3 years in a row to them, then took a season of normal jobs before returning to chalet life this past winter. We bought a barn in a nearby resort 2 years ago and are in the process of renovating it into a chalet, in between working to fund the project. In the 5 years we have been here, the number of catered chalets has risen from just 7 to 23 the last season (St Martin de Belleville) but of those, only 2 were actually still owner operated, the rest are rented, and the “owners” employ staff / chalet couples. There is still the demand from clients, but the chalets have to fight hard to get the guests – a hot tub or sauna versus closer to the slopes, a chef versus a cook, expectations are harder to meet and the anti continues to go up, but the price remains static to compete. I think many chalet operators realise there is not the profit in it when you have to pay rent and staff and all the other costs taxes etc. but what there is, is the lifestyle – winters in the mountains paid for through the buisness. Currently many staff are employed on the “secondment” loophole, allowing UK registered companies to employ staff on UK contracts, and second them to France, meaning they avoid paying french minimum wage and french taxes etc. and can include things like lift passes and accomodation as part of the package, which basically means they can pay about £100 a week maximum. With the advent of brexit, no doubt this loophole will close, the french have been trying for years, meaning to employ people would not be viable / cost effective on french contracts, so either the owner operators will have to go back to operating the buisness themselves, or pull out as for some they cant even boil an egg. The price of a holiday if there are less operators will increase, flight prices too, so for owner operators things may go back to the heady days of more demand than supply as less people come to the alps to open chalet buisnesses – I hope so, we open Xmas 2018 if we can get the place finished!


  3. Gareth Jefferies says:


    RO, thanks for that. You might be right. In fact something similar happened in Switzerland a few years ago. Basically forcing the chalet operators to pay staff on the level with the established hotel model. This put prices up to a level that the skiers would not pay so some of the chalet operators withdrew from the market. We’ll have to wait and see what the overall effect will be. Good luck with your business! Put a link to it on here when you are ready.


    • RO says:


      Hi Gareth, indeed I think it will go the same way as the swiss. I think when I was writing the reply I got distracted – hence the waffle! What I wanted to point out was that we have worked hard for all our lives, so for us, the chalet life is no different. For people coming in thinking it will be sking all day and partying all night and 150k in your pocket at the end of the season, they soon get a reality check and many new chalet buisnesses fold within 3 years – mainly because the owners friends and family come the first year, they cant come every year, so year 2 half of them come along with a few new clients. Unless you keep and build upon those clients, then year 3 gets a little barren. Often, based on year 1, new owners take on a 2nd chalet and staff, based on their “success” of the first year, thinking they have the experience and right to sit back and let someone else work. It never fails to amaze me that there are also people arriving to open chalets that have never actually worked in one, they just stayed in one once and figured it was easy!
      I will keep you updated – I have added at least our facebook link for now, (and understand that may not be allowed), it has mostly reosrt info and the odd “build” update. Website is almost there – minus photos of the “stunning interior” or the “sympathetically renovated retaining its mountain charm”! If anyone wants any info on getting into the chalet buisness, from where to look for jobs to how to rent locally, facts and figures, buisness planning, what to cook, just ask! I spotted a forum post from a few years ago on another site, and people were asking how they find rental chalets – the answer is work in the resort you want for a few seasons, get to know people, you wont hear of them on the net (and if you do, there is a reason no local company has taken it!) you need to have local contacts. I fear I got distracted again!


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