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Baz
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I think anyone proposing to buy a Gite in France should read the article on pages 21/22 of today Mail on Sunday Property Section. Whether you believe what is written or not, it will perhaps open ones eyes to current potential down fall.

The article deals with the flooded market of Gites and the reasons why, as well as giving examples of the down turn in the number of rental weeks per year. It is sorry to hear how people who made the move some years ago and were making a living with their Gites are now faced with income at 50% of the levels 6 years ago. The returns on Gites has fallen over the past few years from 10% per annum to between 5-7% and customers have become more demanding and want the comforts of life such as a washing machine, dishwasher, swimming pool and do not expect to pay any more.

Baz

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It is an open market and that is business. The strongest and best value products in the best areas will survive and the others won't. Just because someone has had a niche in the market for the last six years doesn't give them a right to continue without new competition.

 

 

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I cannot help but agree with the two replies above. Competition in this market is getting hotter, and, to be honest, I don't think its a bad thing. We heard a lot of comments before we moved out here along the lines of "gite holidays are a great idea but the accommodation was terrible, so we're doing an all inclusive to the Dominican Republic next year." An increase in the availability of good quality properties, I think, will overall make France a more attractive destination. Running a holiday accommodation business is just that - a business. If people think that they can succeed at it with no business plan, not bothing with serious homework, not learning the language to an adequate standard, etc then they are really only kidding themselves.
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[quote]It is an open market and that is business. The strongest and best value products in the best areas will survive and the others won't. Just because someone has had a niche in the market for the last si...[/quote]

From our experience the French are complaining too about the competition from the expanding gite/chambre d'hote market.  We stayed in a chambre d'hote recently where the French owners were muttering about how ten years ago they were the only B/B around.  Now there are five more within spitting distance.  They too are disgruntled and worried about their future prospects.

Yes, perhaps the best will survive, but sometimes greed gets the better of them and their rather inflated prices don't always give value for money. 

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This is interesting to me - as we are hoping to re-locate in 2005 and running a gite / B&B is part of our overall plan.  I havent seen the article - but as existing gite owners / business people, what would your one piece of advice be to 'new comers' like myself hoping to enter this market.  Assuming of course your advice wouldnt just be ' don't start one - we don't want any more competition?'

regards

Pamela

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Gay,

Who actually wrote the piece?

I ask, because I am wondering about the qualifications of the person (s)?

That is not to say I disagree, people who have read my posts will know I have said that the gite market, as well as B&B business was reaching saturation point. I don't know what it said of course and hope my next point is not repeating what may have already been written.

You cannot paint all B&B's and Gites with the same brush and say "sell, sell, sell" quickly before all is lost !

Those with handsome turn overs will be worth money in the market place whatever is happening around France. If Gites de la Mer are now taking €20K a year from what was once a turnover of around €35K, the place is looking run down and hardly anything has been done to the place since the initial bodge up several years before, then there will problems selling at a good price. Some of these places have been fetching ridiculous sums in recent years and my thoughts are, that it is these kind of places that will find that the "mugs" are harder to find and a more realistic price will be required to sell these places.

Gites de Vieux Bourg are steadily growing from what was once 30K and is now at around €55K, the owners will of course want good money for what is probably a lovely, well equipped quality gite complex, quality is quality, and good books will be the selling point, as in any business.

What can be a danger, is making ones gites in to something so grand and expensive and then asking 1,500.000€ (a million quid !) for it. That is akin to asking someone to work flipping hard for little more return than investing the sum with a building society.  If I had that kind of money, I would buy a little place, bung some in the bank and then get out and enjoy life with the remainder         

 

 

 

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The article is written by Rachel Loos (Rebeccas sister - no it couldn't be, could it ??) - she quotes two couples, Clive and Helen Tristram, Derek and Angela French plus several agents and Chez Nous (who report an increase in the number of gites and say they are limiting the number of gites advertised.)

The author makes the point that quite a lot of people who were would be customers have bought their own property in France and also that many second home owners are happy to let out their home at a less than commercial rate in peak period. The news from P&O also hasn't helped.

One couple banked on a 14 week season, but find they are only full for 7 weeks, having used their capital doing up the property they find themselves £8000pa down in income, with nowhere to turn.......

I must admit its a little 'gloom and doom' but there are well made points and as it is pointed out, to buy a gite complex is still expensive, it also suggests to make a living you will need 3 gites and it will be very hard work!!

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Gay,

I will see if I can get hold of a copy tomorrow. One of the people is known to us, so it will be interesting to read what they have said and also which agents are saying what.

I have always preached that it takes a min 4 but much better to have 5 gites to make a living from rents. Sorry for those with second homes who rent out but I have to say that by offering some of them at extremely low rents just to cover running ex's, does make it harder for those that live here and are trying to make a living (and often their families) from their places.

 

 


 

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[quote]This is interesting to me - as we are hoping to re-locate in 2005 and running a gite / B&B is part of our overall plan. I havent seen the article - but as existing gite owners / business people, ...[/quote]

Coo - one thing?

Write a business plan. Write a very detailed business plan that covers as many scenarios as you can think of, and when you've done it, if the plan doesn't look feasible then perhaps consider whether this is the right move. A surprising amount of people spend months writing a plan, find that the idea ain't going to work, and then do it anyway. This applies to any business. But whatever you do, I would reccommend that you don't commit yourself to the ferry ticket until you have a comprehensive idea of what you are about to attempt.

That's my one thing, but... Gay and Miki make a couple of good points - if you are able to delay your move or move and rent for a while (never a bad idea anyway) then you might find some rich pickings in a couple of years. I'm no soothsayer but the slowdown in the UK property market coupled with the rise in the number of gite complexes on the market at the moment (at some very handsome numbers, I might add) could be taken to suggest that the wheel is about to come off the market in the kind of properties that might interest you.

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[quote]If anyone has a scanned copy of the article (+ the OCR text would be fab) I would be more than happy to put a copy on my running gites blog .[/quote]

Would some one be able to do that for Ian? It would be very useful to read it, as my local maison de presse this morning, had only the Telegraph left.

Ian, Congrats on your site, it has to be one of the most informed gite websites in France, very interesting.  

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About this doomful newspaper article...remember that these stories always have an angle in order to get people to read it and ultimately sell the paper. There's no point in a story that basically says 'Bookings are a little harder to come by due to greater supply but things are generally reasonable for gite owners'.

Rachel Loos is or was the editor of Elle Decoration magazine. I Googled her name and I think she has moved to France and is writing freelance articles. I found this post of hers in a couple of other forums, placed in September:

"HAS MOVING TO FRANCE WRECKED YOUR RELATIONSHIP?
Have you found it difficult living and working together; suffered financial stress or discovered you both have different French dreams?
I am a British journalist based in France looking for case studies for an article on this surprisingly common problem. Financial remuneration possible.
If you are interested email Rachel at"

I don't know if this relates to yesterday's article or another one she is writing, but you can see that a post like this is not necessarily looking for a balanced view of the situation. Bad news sells papers!

Paolo

 

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Paolo, I agree to some extent, however this scenario has been pretty much forecast on this forum in the past and she does quote some sources:

Ingram Monk of www.FrenchProperty.com

Mike Norman of Nord Charente Homes

Jonathan White of VFB Holidays

Tim Williams who runs a course called 'How to buy and run a Gite Complex'

Colleen Snitch from Simply Perigord

Surely some of this is just common sense? The 'cake' is only so big and the more there are, wanting a slice, the thinner the slices.

Add to that the rising the cost of crossing chanel,( I would hazard a guess that the majority of gite renters come by car.)and then the competition from cheaper places such as Spain and Adriatic destinations.

The article also includes a comment that it is estimated that 150,000 Brits live in France full time and 500,000 have second homes there.

I'll attempt to scan the article in later.

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Agreed - the conditions are moving against us, not least the fact that many potential renters are becoming owners and siphoning off 'our' renters. It's a double whammy.

It's interesting that in the UK, as well as the 12 nightly programmes dedicated to those wanting to buy homes abroad, there is now one on 'How it all went horribly wrong' (can't remember the title). The pendulum is swinging back the other way... Perhaps in a few years there will be loads of programmes on how people lost their shirt buying abroad, and only one on actually buying abroad?

Paolo

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[quote]From our experience the French are complaining too about the competition from the expanding gite/chambre d'hote market. We stayed in a chambre d'hote recently where the French owners were muttering a...[/quote]

"Yes, perhaps the best will survive, but sometimes greed gets the better of them and their rather inflated prices don't always give value for money. "

That is exactly my point. The inflated prices won't be value for money and as soon as there is no value people will stop purchasing.

The price is not important, the value is. Some people can afford £1000 per week but they expect top quality.

I know a local gite aimed at just couples no kids. Small quite basic accomodation cheap as chips and they took 30 weeks this year. They represented good value in the correct area and marketed well. Simple really.

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Baz.

I do feel that over the years (at least 4)- it might be fair to say that many of your postings spell a little of doom-mongering - I cannot remember anything you have written which inspired people to be positive etc., (... even though this time you might be right in terms of over-saturation of the gite-market).   I do wish that maybe in the future you could maybe try posting if you have something encouraging to say because most of the time I don't even bother to read your messages any more due to past history!  I know you will not mind these criticisms since you always feel free to criticise others (liberally!)

You mustn't always believe what you read in the papers you know!  Did you read the Telegraph article a few days after the recent P&O fiasco which said that house prices in Normandy were imminently crashing due to the fact that there wouldn't be any way of getting there cheaply?  The journalist was just looking for a quick result/reaction and many of his/her claims were completely fictitious and perhaps designed to put a bit of a shiver through the French holiday homes market (maybe a parallel with current claims that we will soon face a 47% drop in the value of our homes in the UK - in which case there would be a serious number of people looking for state welfare if this happened - hence IT WON'T because the government can't afford that either).

A bit of positive encouragement or a more objective assessment of situations would be welcomed - from me at least - life is not black or white but a multitude of greys.

Valerie

 

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Here is the article:

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 [t 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 resuIt is a wholly saturated market in l 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 any- one 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 reg- ular 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.

r 'Once they were happy to have a rustic gite and go back to basics. Now they want a washing machine, dish-

Washer, swimming pool but they I don't expect to pay any more.'

All this means that making a profit is tough. Tim Williams, who runs a course called Row 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 re buy a property with gites for £400,000 7~ 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 rt 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 holi days, to pay
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[quote]Baz. I do feel that over the years (at least 4)- it might be fair to say that many of your postings spell a little of doom-mongering - I cannot remember anything you have written which inspired peopl...[/quote]

Valerie,

I live in the real world and with over 750 posting here there as sure to be postings where people disagree with certain topics. This article was intended to let people know that all is not green in the Gite market and was directed at anyone considering starting a Gite to see both sides of the coin. Frankly, with far in excess of 50% UK people moving to France returning within 2 years, if reading this topic saves just one person making a mistake then it has served its purpose.

Please do not be patronising  by saying, "You mustn't always believe what you read in the papers you know! " I am worldly and mature enough to take what the papers say with a pinch of salt. I do not think this is an appropriate place to make a personal assault on any contributor and if you have to attack anyone use PM method. Unfortunately, it is because of your type of comments that some excellent and knowledgeable forum members no longer post here. With 16 years of French home owning I have tried to pass on my experiences to benefit others and if you find me negative at times then so be it.

Baz

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Firstly sorry for the length of this posting.

We realised then that it just wasn't worth it anymore,' says Clive.

 

“We realised then”, when ? The very day they shut and added up their takings? Or was it happening years earlier but they did nought to stop the downward slide. Now I don’t know the answer but this story misses an awful lot of the why’s and wherefores, just a statement of “the business is no good now”

 


"But the Tristrams are not the only ones suffering. Thousands of British families across France have discovered- that the gite bubble has burst.

 

What a sweeping statement,  what ALL gites have now had it, what a lot of twaddle……typical newspaper “scareline”


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.

 

No change there then, bad gites have always had a bad time but yes, it is even more difficult now, especially for the persons who have overcharged for crap accommodation.

 

…..British holidaymakers face a difficult journey to France –and so may decide not to come at all.

 

So ”may not decide”, do you spot how the mights, maybe’s, could do’s, are often slipped in to these reports, très journalese, very similar to “allegedly” really. Tourists deciding to go somewhere different,  well no one can guarantee where the tourists will go from one year to another. It often depends on what is flavour of the year and whether or not they “do France”, well we have always been at the whim of whether or not the British will come.

We decided very early, from day one in fact, that the French market would be our aim and the British and other nations would be aimed at as well but at least with the French, we had no ferry worries and possibly only unemployment worries from the French side of things, to interfere with our plans. So far so good


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.

 

Do we know how much these 2 charge per week? That may have quite a bearing on the attraction of the place. Also, I am sorry but some parts of the Loire are not really the best place to be for gite or B&B businesses when times get tough. Who told then that a 14 week season in the Loire was possible for 4 gites ? There was mistake number one, surely.  Was the pool heated or not. Again too limited on explanation.

 

 

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.

 

Yes, now that is a worrying trend. I mentioned this a couple of years ago on another forum and was derided by some as a scaremonger and there was no such thing as saturation. Now many of us on here have mentioned recently, that there are just too many new arrivals opening up a B&B or gites with no drawn out plan of action, several with insufficient collateral to “do up the place” and survive the difficult opening years whilst the business builds itself up.

I personally have seen a few recent gite set ups and B&B’s and boy, some are not a good advert for British places to stay and the fear could be all of us being tarred with the same brush.


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 tu

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Firstly I am NOT qualified to talk about Gites as I only have a B&B and as B&B’s were mentioned I feel a little qualified to make a few comments.

 

When buying any type of business aimed at the tourist industry location must be a giant factor and those in the right location will do better than those who are not. I don’t know any of the persons mentioned in the artical or where they are located.

 

Our prefecture in Carcassonne sends out a monthly free magazine and about 5 months ago did an article on tourism. Whilst I don’t remember the article exactly they did point out the about of ‘beds’ available in Gites and B&B’s compared to the amount of tourists visiting the area in 2003. The startling figure was that for each visitor there was a choice of between 50 and 60 odd beds to sleep in. Now they got the quantity of beds from officially recognised organisations such as Gites de France so they don’t include the individual new owners that rent out or those that are not members of an official organisation so you could add possibly an extra 20 beds on to this figure.

 

They also stated that much of the accommodation ‘fell well beneath international/European standards’. Certainly in my business one of the questions asked very early on is ‘are all your rooms en-suite and are they clean?). Indeed my new local competition has no en-suites and has two toilets, two hand basins and one shower cubical, all in the same room (OK the toilets have screens and doors round them – bit smelly first thing I would think) for 5 bedrooms supporting 12 people. He has had little trade this year and we have had a few of his clients who stayed one night with him and were looking for rooms en-suite.

 

Having said that we are informed by our local tourist office that tourism is down this year across the whole of France and in our area about 60% down although due to some good tips and advice (you know who your are and thanks again) we have had guests up until Monday and have been full for July, August and September and have had only 14 nights since May with nobody at all (you can come and check the books if you like). Mind you the passing trade has been very little and probably accounts for about 30 nights this year.

 

Now a French friend of mine who has been in the business for many years keeps stats and has told me that yes it’s a bad year but then it goes in peeks and troughs and often a very good year is followed by a very bad year and then about 3 or 4 ‘normal’ years which having been here only 2 years I have yet to experience – the normal years that is.

 

Two and a half years ago when we first looked in France we looked at going in to the Gite business and run a B&B as well. More than one agent told us that the profit margin in Gites was falling rapidly and even then were talking of a 5% figure. This scared us off so we went for only a B&B and invested the saved money which I am glad we did.

 

Miki said about quality and he his 110% correct. We have closed now to decorate our stairs and landing plus our own room (always the last to do) but then next year we will have to decorate the letting rooms again after 3 years, supprising how much wear and tear they take. Keeping things clean is a big task, we clean under beds and after seeing a German lift the mattress to inspect underneath clean and turn them every two weeks. I know where Miki is coming from, there are a lot of people out there that buy a house, paint the rooms, buy second hand furniture, put a sign up and wait for the money to roll in, well we all know life is not like that.

 

The other thing Miki implied is that it is very foolish to base your business on UK clients (we have a B&B a few miles away in the back and beyond that only take only English speaking guests and advertises as such), this is stupid. A high percentage of our guests are French followed by Belgians and Spanish (Catalans to be precise) and only a small percentage have been English.

 

Are people selling up their complexes,? We learnt on Sunday that a big recently renovated complex some 15 miles away on the main Perpignan route is up for sale. It comprises of 5 Gites, a B&B (5 rooms), pool, owners accommodation (separate house) and two further houses to renovate, all in one complex. They (Belgians) have run out of money (they have renovated to a very high standard) and just can’t get the return on their investment, asking price is in the region of £1.5M. We also know of two couples who had B&B’s (both badly positioned) who have closed and gone back to the UK because they couldn’t make it work.

 

So whilst I don’t think the article is totally ‘honest’ I think there is some truth in it but as has been said you really need more detail.

 

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If the accommodation market is so flooded in France, why then are many conseil generalles and offices de tourisme handing out up to 30.000€ for a gite and 5000€ per room to help people renovate and provide accommodation? They are in the Vendée and Deux Sevres! They have stated that there is a shortage of holiday accommodation, particularly at the luxury end of the market.

If some of the British gite owners marketed to French tourist, they might find that they were more successful?

I think we ought to email the Mail with comments!

 

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If some of the British gite owners marketed to French tourist, they might find that they were more successful?

FB,

Thanks a flipping bunch for letting the secret out the bag

Around here if you are pretty lucky, you might now get up to €12000 for help with creating a gîte but Brittany does have quite a lot of Chambres D'Hôtes and Gîtes already.    

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[quote]If the accommodation market is so flooded in France, why then are many conseil generalles and offices de tourisme handing out up to 30.000€ for a gite and 5000€ per room to help people renovate and pr...[/quote]

My comments were for our area only based on fact, I can't really speak about other areas because I don't know.

 

Having read your comments and just about to start work renovating my final en-suite I could do with some free money. I phoned the Offices de Tourisme in Carcassonne which is the head office for the Languedoc region. They said they did not give out grants and that as far as they were aware their department do not give out grants anywhere in France and promptly asked me where I heard such a thing. They suggested I speak to Gite de France who might help and when I mentioned that the reason I asked was because of lack of accommodation available in France and that in Vendée and Deux Sevres they did I actually heard the lady laugh.

 

Unless you have actually asked and received a grant I really wouldn’t believe all you hear.

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