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Gite Bookings!!


Thebiga
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I think a lot of the problem is due to the falling pound, the exchange rate is as low as €1.11 at some dealers. For ourselves we booked our holiday last year when the euro was still fairly high, we have a strict budget for holidays and the weak pound means we will not be able to spend as much as we would have liked whilst we are in France. There was a report on TV last week saying that a meal for two would cost roughly £7 more this year...........fuel has risen out of all proportion, we are travelling right down through France to the south near Adge, although we have a small car which is very econimical fuel and tolls are going to take up almost half our budget.....we also have 4 night booked in village B & B's to break the journey into manageable chunks.

We are francphiles, visiting as often as we can afford to do.............( we wanted to live there but the 3 tries we had all ended in heartbreak) right now people in the UK are loking at staying at home, the exchange rates bring a UK holiday almost on par.

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America and South Africa are good value for money for UK holiday takers - Europe isn't great for the finances at present, having said that I can remember holidaying in France when the exchange rate was around 8/8.5 francs to the pound, and it had been near 10 the year before, so I guess there is a core of people who will come, come what may.
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Me too, in 1997 we took our caravan down to Poitiers, we were house hunting, the franc was 7.5 to the £, our previous trip it had been 9!!!!!!!!! quite a difference.........and we had to reign in our spending somewhat. I was looking for Le Creuset.....it was dearer in FRance than in the UK at that exchange rate.
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[quote user="NormanH"]Surely the answer is to reduce prices 20% to allow for the low exchange rate.

See:

http://www.guardian.co.uk/business/2008/apr/10/currencies

[/quote]

Great idea Norman! For those of us whose main income is from gites and live in France, do you think that our overheads, shopping and fuel bills etc. have also gone down 20%? Do you really think that we pluck our prices out of the air when we are pricing? [:@] A bit of tweaking may be necessary, but I doubt there are many people who run gites as a business who could  maintain their level of service to customers with a 20% reduction in income.

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[quote user="ltf"][quote user="NormanH"]Surely the answer is to reduce prices 20% to allow for the low exchange rate.

See:

http://www.guardian.co.uk/business/2008/apr/10/currencies

[/quote]

Great idea Norman! For those of us whose main income is from gites and live in France, do you think that our overheads, shopping and fuel bills etc. have also gone down 20%? Do you really think that we pluck our prices out of the air when we are pricing? [:@] A bit of tweaking may be necessary, but I doubt there are many people who run gites as a business who could  maintain their level of service to customers with a 20% reduction in income.

[/quote]

But this is what is being asked of people on  a fixed income in sterling, such as Pensioners living in France.

And surely there are very few overheads with Gites? The investment was in buying them, but the costs of staying in them is carried by the holidaymaker who has to buy their own food, pay the electricity etc.

Isn't it better to accept a lower margin, but keep up the level of bookings?

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[quote user="NormanH"][quote user="ltf"][quote user="NormanH"]Surely the answer is to reduce prices 20% to allow for the low exchange rate.
See:
http://www.guardian.co.uk/business/2008/apr/10/currencies
[/quote]
Great idea Norman! For those of us whose main income is from gites and live in France, do you think that our overheads, shopping and fuel bills etc. have also gone down 20%? Do you really think that we pluck our prices out of the air when we are pricing? [:@] A bit of tweaking may be necessary, but I doubt there are many people who run gites as a business who could  maintain their level of service to customers with a 20% reduction in income.
[/quote]

But this is what is being asked of people on  a fixed income in sterling, such as Pensioners living in France.
And surely there are very few overheads with Gites? The investment was in buying them, but the costs of staying in them is carried by the holidaymaker who has to buy their own food, pay the electricity etc.
Isn't it better to accept a lower margin, but keep up the level of bookings?
[/quote]Years ago I worked in the hotel business.  If the rooms weren't full as the high season approached, then the prices were cut until somebody booked one. Ultimately you have to ask yourself - is it better to have an empty gite, or one that brings in 20% less than it did previously?  And only the owner knows the real answer.
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[quote user="Russethouse"]FWIW my opinion is that Gite holidays offer better value when funds are low - you ca cater for yourself, bring tinned food etc[/quote]

 

Quite right RH and gites in France are often cheaper than renting a cottage in the U.K. especially during high season.

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"And surely there are very few overheads with Gites? The investment was in buying them, but the costs of staying in them is carried by the holidaymaker who has to buy their own food, pay the electricity etc."

NormanH

Many gite owners include electricity / gas / other heating, laundry and water costs in the weekly rental.

 

Holidaymakers still have to buy food for the family whether they are at home or away.


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[quote user="cooperlola"][quote user="NormanH"][quote user="ltf"][quote user="NormanH"]Surely the answer is to reduce prices 20% to allow for the low exchange rate.
See:
http://www.guardian.co.uk/business/2008/apr/10/currencies
[/quote]
Great idea Norman! For those of us whose main income is from gites and live in France, do you think that our overheads, shopping and fuel bills etc. have also gone down 20%? Do you really think that we pluck our prices out of the air when we are pricing? [:@] A bit of tweaking may be necessary, but I doubt there are many people who run gites as a business who could  maintain their level of service to customers with a 20% reduction in income.
[/quote]

But this is what is being asked of people on  a fixed income in sterling, such as Pensioners living in France.
And surely there are very few overheads with Gites? The investment was in buying them, but the costs of staying in them is carried by the holidaymaker who has to buy their own food, pay the electricity etc.
Isn't it better to accept a lower margin, but keep up the level of bookings?
[/quote]Years ago I worked in the hotel business.  If the rooms weren't full as the high season approached, then the prices were cut until somebody booked one. Ultimately you have to ask yourself - is it better to have an empty gite, or one that brings in 20% less than it did previously?  And only the owner knows the real answer.[/quote]

 

Depend how low your profit margin was in the first place and what the competition is doing to some extent - but if I was marketing I would do a few sums and highlight the value for money compared to x.y and z

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[quote user="NormanH"]

But this is what is being asked of people on  a fixed income in sterling, such as Pensioners living in France.

And surely there are very few overheads with Gites? The investment was in buying them, but the costs of staying in them is carried by the holidaymaker who has to buy their own food, pay the electricity etc.

Isn't it better to accept a lower margin, but keep up the level of bookings?

[/quote]

As Cendrillon says, many gite owners do an inclusive price and even if they don't, they extra charges they add on for cleaning, heating, bed linen etc. add up. Do you think the gites maintain themselves, that guests replace every glass they break, that you don't have to invest in new things to attract more guests, that swimming pool filter pumps, cookers, washing machines, dishwashers never need to be replaced? Well, they do, and it all costs money. Those costs aren't included in my overheads, they are just for utilities, cleaning, taxes, etc. I don't think anyone gets rich doing holiday rentals.

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This is what I did five years ago when I was that the market was becoming saturated.

I had a small country place that I now let to local people long -term.  It's not the same sort of luxury market as those with swimming pools and dishwashers, but it does mean I have a guranteed income from the CAF.

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As someone with a mix of "long-term" and "holiday" buy-to-lets I reckon there is no magic answer to the conundrum of finding that holy-grail of zero-hassle/workload, good capital appreciation, great rental incomes, caring tenants falling over themselves to stay with you and assets easy to sell.  There really are so many variables to take into consideration.  With I suppose key questions being "which propertites shall I have in my portfolio and how much should I spend on each?" ... you make your money (capital) when you buy. (That's the theory anyway - I've made several mistakes myself!) ... key questions that are of no help once you have bought 'em!

And I guess my own trial and error discovery over the last 7 or so years for both type of buy-2-let (once you have bought them) is to offer a few luxuries over the norm for your price bracket and employ the very finest property managers you can find (check out references with a fine tooth comb and don't cost cut on this vital member of your team): the rest is largely marketing.

For many of my gite-owning friends there is another consideration - they are lifestyle-gite owners.  Not the typical buy-2-let investor at all, rather live-on-site property owners with one or two (or three) self contained units, often in an annexe, outbuilding or converted barn.  For them the scalability of their business is not important - rather it is having a rural french lifestyle in a lovely property that can be (part) financed by guests.  Often sociable people, their priority is maintaining and enjoying their lifestyle.

Walking that tightrope between having a succesful business and a gorgeous lifestyle can be tricky. (especially if you live on-site).

If one is trying to "have a it all" (business and lifestyle) with your buy-2-let concept problems can occur when the lifestyle choices don't make good business sense or when business decisions incur cuts in quality of life.   My observations of those who manage the balancing act well is that something has to take priority - Is this primarily a business? Or is this a lifestyle-choice?   I can immediately think of two families I know: one for whom their gites are most certainly a business and the other for whom they are very much part of their (semi/early) retirement lifestyle. Both families are getting what they want/need out of their buy-2-lets.

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According to an article in the travel supplement of one the Sunday newspapers, the good news is that most people have already booked their travel arrangements for this years summer holidays and therefore any downturn in Brit visitors to the Eurozone should be limited. Although, Brits will be spending less and may cut down on short break visits.

However, the bad news is that if the weakness of the £ persists together with a slow down in the economy generally, then an adverse impact will definitely be felt next year, as Brits stay at home or holiday in non Euro countries.

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Another consideration I forgot to mention, is what happens next year to air fares, especially amongst the low cost carriers.

There is an expectation that the likes of Ryanair and Easyjet will have to substantively increase their fares next year, because their fuel cost hedging runs out in the Autumn. Both airlines as a result are predicting a substantive reduction in profits in 2009 and their shares prices have fallen accordingly.

Meanwhile in the USA, low cost carriers are falling like nine pins!

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Do Gite bookers really fly to their destination ? It's ferry fares I'd be watching.

I think I would also put lots of cheap or free things to do, places to go on my web site, and start targeting my marketing to other Eurozone countries...

Of course its all very well in theory, but the truth is I don't have a Gite[:)][:)]

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