Occupancy levels

[sundance]

My wife and I are considering spending around 450,000 euros on a large property in Limousin, and using it to provide:
- 5 rooms for B&B
- 1 gite
- Home for ourselves
It would require that we sell our house in England to fund it.

My question is: would we get sufficient occupancy to provide an income for 2 adults and 2 small children? Our hope is that it would be our main source of income. I have worked out some figures, and it looks a little doubtful. Here's the scenario I came up with, for the B&B side only.
Peak season (2 months) : 95% occupancy
Mid season (3 months) : 50% occupancy
Low season (7 months) : 10% occupancy

That would give us a turnover of nearly 28,000 euros. I have estimated costs at 10,000 euros, giving a profit of 18,000 euros. Doesn't seem much. We are not expecting to live like kings, but we would struggle on that.

Do you think my estimates are wildly inaccurate? Any feedback would be very welcome. Thanks.

[CatherineS]

I don't reply from experience - we have only just bought our house and it is our holiday home which we are only letting out as a gite when we are not there, to help towards the costs.

But there have been a number of threads on this very same subject and the gist of them seems to be that you should think very very carefully before moving to France and expecting to make a living from gites/chambres d'hotes alone. Suggest you have a look through the archives, for example a recent one in the Gite Owners forum called "Advice Needed for Potential Gite Purchase". I don't know the Limousin region at all - does it have a good tourist trade?

Please note, I am not trying to be a killjoy and I spend many hours daydreaming of leaving London and being able to live full-time in my lovely house whilst letting out a few rooms, but somehow I don't think this is going to come about unless I can find some other source of income...

I sincerely wish you good luck.

[Anton Redman]

You can do some desk research by regularly checking availability on the web to find out if there is excess demand or excess supply. In the area of the Haute Vienne near us I do not know of anybody who runs close to those occupancy rates.

Alternatively take a week's holiday out of high season and stay in a different B & B each night around the area you like and talk to the owners. Another alternative is to look at particulars /books of established business which are for sale.

Taking the peak season B & B rooms 95% occupancy assumes 9 rooms void out of 175 nights in a seven week season. You will not get that level through passing trade and full week's bookings will be few and far between. I can just about see an established business offering good value with a reasonable percentage of repeat / recommended business getting to that level but not for five or more years.

[Suzyq]

Depending on your area, in Limousin I think your occupancy figures may be a little optimistic, do you have a speciality to offer? such as fishing or haute-cuisine?
The maximum number of room you can have is 6 and/or no more than 15 people in total before you are classed as a hotel and come within different rules.
If you contact Jean-Claude Rival at the Limousin Gites de France office in Limoges
email : gites.de.france.87@wanadoo, he can send you literature with some very helpful advice - that does not commit you to going with GDF.
Suze

[sundance]

Thanks to SuzyQ for the contact at GdF, I will contact him straight away.

Thanks to all for the feedback. Maybe the estimate for high season is too high (95%). But it is the low season (10%) which could be most significant, as it covers most of the year. If we could achieve perhaps 15 or 20%, that could make the project viable. We have some ideas on specialities to attract guests, but nothing definate as yet.

We would not be targeting the British exclusively, we would hope to attract french people on long weekends, etc. I speak french, my wife does not but is starting to learn.

I guess most guests come from passing trade, rather than pre-bookings? It would make sense therefore to be fairly close to a main road, where one can put an advertising board.

[Annabella]

LAST EDITED ON 07-Feb-04 AT 04:58 PM (GMT)

Working on the same permutation of rooms + gite and being in an area where (theoretically) accommodation is cheaper, I would say your calculations are far out. Double your running costs at least and reduce your occupancy expectations. Work on the worst case scenario - and there you have it. Small businesses provide their owners with a modest living and a lot of hard work - and an awful lot of worry.