Running a Gite in Brittany

One afternoon at the end of August, Clive and Helen Tristram sat down and took stock of their gite business. The season had been their worst, their income plunging to just £10,000 - half the amount their six-year-old business once earned. 'We realised then that it just wasn't worth it anymore,' says Clive.
But the Tristrams are not the only ones suffering. Thousands of British families across France have discovered that the gite bubble has burst.
Once buying a gite or two seemed a guaranteed ticket to the good life and comfortable living in France, but today many gite owners are struggling to cover costs.
And the situation has just become worse: with P&O Ferries closing all but one of the Western Channel routes from Portsmouth, and even reducing between Dover and Calais, British holidaymakers face a difficult journey to France –and so may decide not to come at all.
For Clive and Helen, the slump in the market is troubling, but at least they have Clive's income as a management consultant to fall back on.
However, for Derek and Angela, the downturn is potentially devastating. Having sold up in Britain, the couple sank a significant proportion of their cash into a 17th Century farmhouse with outbuildings in Clere du Bois in the Loire. After spending almost £90,000 creating four gites with shared pool, they opened for business on September 12th 2001. They expected trade to be slow at the start, but banked on a 14 week season. They have been shocked by the reality. 'Even now we are regularly full for just seven weeks, over July and the rest of the time is in the lap of the gods,' says Angela. The couple are down at least £8,000 on their estimated income – and there is nowhere to turn. 'All our equity was swallowed up doing up the property,' says Angela. This is it for us. We are not doing it for pin money, this is all we have and we are just surviving.'
The cause of the problem is supply has outstripped demand Over the past few years thousands of Brits have headed across the Channel determined to fulfil their dream of living in France it is estimated that 150,000 live there permanently, while 500,000 own a second home.
Buoyed by the rocketing UK property market and the comparatively low cost of property in rural France, and encouraged by TV programmes describing the apparent ease of turning barns into money-making enterprises, many have chosen to fund their dream by becoming gite landlords.
The result is a wholly saturated market in which oversupply is affecting everyone from long established gite owners to beginners Reports suggest there are five gites available for every person wanting to book one. In the past five years, Chez Nous, the annual gite 'bible' for owners and renters, has seen the number of property advertising pages rise from 330 to more than 500, and is now restricting the number of gites advertised. Almost every gite owner complains of a 'flooded' market causing slow bookings and lower prices. Some are getting no one through the door. Kim Armstrong, whose husband works full-time in London, started trying to rent out her three-bedroom gite in the Dordogne last summer, but has not, had one single booking. She has dropped her £1,100 per week starting price to £800, and now will take anyone for £20 per person per night.

Ruth Reid, an estate agent, has had gites in the Charente for ten years. This year, for the first time, she was empty in June. 'People used to book two years in advance to get a private place with a swimming pool,' she says. 'Now there is an endless supply of properties with a pool.'
Clive and Helen started their business in 1999 with just one cottage in Charroux, in the Vienne, south-west France. A few months later they acquired a second cottage nearby.
'We calculated on both gites being full for 16 weeks of the year and charging the going rate,' says Clive. 'At first there was no pressure on the price during the peak season, and at other times we had good low-season bookings.' They were so confident about the future that for the 2002 season they rented another cottage called Chez Pierre and sub-let it as a gite as well.
Two years on, however, the picture could not be more different. This year Chez Pierre had no bookings at all, and the two others just a few - many of those let out at a discounted rate. The Tristrams plan to take drastic action. 'Next year we will not let out the third gite, and we want to sell one of the cottages,' says Clive. He says one reason for the market downturn is that former gite holidaymakers have bought their own property. He estimates that at least ten of his regular customers have now bought homes in France - that's 20 weeks' rental lost. Meanwhile, Angela says many of those buying a second house rent it out at a rate that distorts the market. 'They are undervaluing the property for July and August and that makes it more difficult for people like us who are doing it for real,' she says. lngram Monk, of the long established property website FrenchProperty.com, has some blunt advice for those planning to take on a gite’don’t do it. You're jumping on a bandwagon that's long departed. People see a TV programme, and think they can do it, but by the time they do so, they are following a dream that is a few years old. There are too many gites now.
'It seems that for everyone who wants to book a gite, there's someone looking to buy one. You think you'll be the exception that you will succeed where others haven't, but that's not the case. You will simply be throwing money away.' Especially as the latest news from P&O is yet another blow to an already blighted French tourism industry. Last year visitors to France fell by 20 per cent and reports suggest this year is no better. Last year's decline was blamed on last year's heatwave and the advent of cheap flights to even cheaper holiday locations.
'France is more expensive than Spain and then there are the new destinations such as the Adriatic,' says Monk. But while tourism may have fallen, the cost of a gite certainly hasn't. Estate agent Mike Norman, of Nord Charente Homes, says that ten years ago you could buy a hamlet for £30,000 and spend almost the same again renovating it into a gite complex.
'Today you spend £200,000 to buy a property, then another £30,000 per gite in renovations. It takes about 12 years to recoup the original outlay.'
And customers have become ever more demanding. 'People expect more and more for their money now,' says Jonathan White, marketing director VFB Holidays, which has been in the self-catering business for 35 years. 'Once they were happy to have a rustic gite and go back to basics. Now they want a washing machine, dishwasher, swimming pool but they don't expect to pay any more.'
All this means that making a profit is tough. Tim Williams, who runs a course called How To Buy And Run A Gite Complex, says the return on gites has fallen over the past few years - from ten per cent per annum to between five to seven per cent. 'The ability for gite owners to raise prices has been curtailed because of the competition, yet the costs of a gite complex have risen,' he says.
Potential gite owners often overestimate the return. 'For example, if you are buying a property with gites for £400,000 ~ and the house you live in is worth half of that, then you calculate your rental income on the remaining £200,000 only " says Williams. 'The return would be about £12,000 per annum.' Monk's grim conclusion is: 'Gites are no way to make a living. To have a chance you need at least three gites, but then the workload is astronomical. , Having an annexe or a barn gives you no return at all. Colleen Snitch, from the holiday rental company Simply Perigord, has 78 homes on her books, mostly those of British second-home owners.
'You earn enough for your own holidays, to pay for maintenance and redecoration, but that's it. It will not pay back a mortgage and if you are highly geared, don't expect it to work,' she says.
Clive and Helen calculated that even when they were doing well, their profit was just 20 pence per hour. Now they hope to get 200,000 Euro (about £138,000) for the cottage in Charroux and that will go some way to alleviate the pain of previous low returns. As for Angela and Derek, and anyone else struggling with half empty gites, Monk does not hesitate in his advice. 'Sell now,' he says. 'I know it sounds morally reprehensible, and in a way it , is, but if you don't get out now, it will be too late. 'Soon more and more people will realise that gites are not a good investment and want to bail out. And then it will be too late.'