How to start a Successful Ski Chalet Business

1. Getting the hands-on experience

I cannot recommend enough getting the hands-on experience of working in catered chalets yourself first, before starting any venture. In fact, I’d say it’s critical.

Coalface experience is crucial in getting to know your target market. Their likes and dislikes, why they picked their current resort and chalet, what differentiates an okay ski holiday from a great one.

You need contacts to start a chalet company, a lot of contacts. There’s no better way to build your network than to spend a winter working in your chosen ski resort.

Finally, it’s the litmus test to see if you enjoy it. The grass is greener on the other side, and there are definitely cons as well as the pros of working in ski chalets.

Obvious? Perhaps. But you’d be surprised how many phone calls I get from people who want to run a chalet company, but have never run a chalet before.

2. Finding your first chalet

It’s all about Networking

Finding a chalet to rent is all about networking. Lots of the properties in ski resorts are owned by what would have been the ‘original families’. Families who lived in the mountains long before skiing arrived at their door.

You’ll see the same surnames everywhere in a ski resort - above the door of the ski hire shops, the name badges of the ski instructors, the people that own the chalets that you’d like to rent. These are the families who hold the keys to the resort, and you should be on first-name terms with them.

Chat to everyone in a ski resort. I remember finding a chalet once by asking the cashier at a petrol station. Chat to the people in the ski hire shops, the ski instructors, the cafés, the lift pass office, everyone. If they are a long-term resident of the ski resort, they’ll own a chalet or know someone who does.

Be prepared for a lot of blank “No’s”

There’s a lot of trust to be built before someone will rent you their very expensive ski chalet for the whole winter. Every chalet owner knows a horror story about a ski company that damaged their chalet and didn’t pay the rent. It takes a lot of popping in to chat about the weather before a chalet owner will let on that they actually own a chalet.

Market yourself

No, the customer is not always right. You may be trying to rent their chalet, but you still need to put your best foot forward. I like snowboarding myself, but I’d never go to meet a chalet owner in snowboarding kit, because it’s very likely they don’t like snowboarders and that’ll just make my life harder in trying to build their trust.

You should have business cards, a business name and a website if possible. The aim is to look like a proper, trustworthy business with pockets deep enough to pay the bills and the business know-how to make it work.

Are there any companies who can find me chalets?

Not many. Almost all deals are done on a word-of-mouth basis.

That said, there is the odd company that work in such an area. If you are looking in France then I’d chat with Sam from https://www.bedsnboard.com/, they do offer season-long rental.

Ask us

We are not a property agency. But we do occasionally hear about chalets for rent. We post them up on our chalets for seasonal rent page, or just follow us and you’ll be the first to know.

Using high street agencies

The high street agencies take a hefty commission from the chalet owners - up to 20%. So understandably, the chalet owners generally try to rent directly first. Ski chalets normally only end up with high street agencies at the very last minute, or if the chalet has a mighty skeleton in the closet.

It can be a handy way to pick up very last-minute chalets, for a reduced rent. That’s no good for your first year when you need lots of time to plan and market your new ski business, but one to keep in mind for future expansions.

Time of year to do the deals

Most chalet contracts are signed in March and April for the following season. Once everyone gets through February half-term & the end of season is in sight, then minds start to turn to the following year.

You do get the odd contract signed much earlier, but that’s fairly rare.

Come late April, into May, ski resorts turn into ghost towns, with everyone away - taking a well-earned break. Then late May people start to return to prepare for the coming summer season, and a few last-minute deals are done. By then, any chalet owners without a deal will be starting to get a little nervous, and by July time any owners without contracts in place will be dropping their rent expectations. That said, it’ll likely be slim pickings by that time of year.

Top tip: don’t be too particular in year 1

The hardest thing is getting your foot in the door in year 1. Once you are established in a ski resort, with a reputation for being great to deal with and paying your bills, then chalets will start coming to you. So, your aim is just to get going.

It’s easy to write a long list of requirements - 5 bedrooms, all en-suite, hot tub, sauna, big kitchen, parking, 200 meters from the slopes… but, it’s unlikely you’ll have a huge range to pick from. Go with an open mind to all chalets, as you might just need to get something that’s okay for the first year, before upgrading to your ideal chalet in year 2.

3. How chalet contracts work

They are all different

I’ve seen a lot of chalet contracts in my time. And it’s funny how most chalet owners think that their contract is the universal standard. Some are half a page saying “I’ll rent you my chalet for €XX,XXX, sign here…”, and some are 30 pages in two languages of full-on legal jargon.

There are a few common threads though.

Contract Length

Contracts are either for the full year or winter season only.

When doing winter only, the owners generally don’t really care too much about the exact start and end date. The chalets are all closed inter-season, so it doesn’t make much difference whether you take on a chalet on the 15th of November or the 1st of December.

A 3 winter / 3-year contract is fairly common, though I’ve seen contracts ranging from 1 year up to 5 years.

Break clause

A break clause is something that either party can exercise after the first season that, in turn, cancels any future seasons. It is fairly common though not in the majority of contracts. I’d definitely recommend getting it added.

Chalets do have skeletons in cupboards that you just don’t find out about until you are mid-season. Dodgy drains, lack of hot water, lack of water at all, unhelpful owners who are very slow to fix anything. We’ve seen countless issues over the years when the ability to finish the contract at the end of the season has come in very handy.

Fixed Rent model vs “Profit Share” model

There are two main models.

In a Fixed Rent model, you just pay the set amount and the chalet is yours. Be it full or be it empty, the rent is your responsibility to pay.

In a “Profit Share” model, you agree to split the total sales value with the owner. The common split percentage for a catered chalet might be 70% for you and 30% for the owner, around that ballpark. The amount for the owner is much larger for self-catered chalets and apartments. Sometimes, in a Profit Share, there’s a guaranteed minimum for the owner too.

Look out for the details here - it is the total sales value inc. VAT or ex. VAT? What exchange rate is to be used if you charge your guests in a different currency? The devil is in the detail here.

Deposits and timing for payments

Generally, you’ll pay a deposit upon signing the contract. This can be 10% to 30% of the total rental value for the season.

The rest is then paid in instalments over the winter, sometimes monthly, and sometimes in just a few lump sums.

Some owners will also ask for a damage deposit when you get the keys, though that’s not particularly common.

4. Setting up a company & regulations

Setting up a company

I’d always recommend getting a good accountant to do this for you. It’s a job you’ll do just once. Although you can do it yourself, it’ll likely be a false economy to learn everything, especially in a foreign jurisdiction.

There are nuances to ski chalets, and it’s generally best to get an accountant that’s experienced with chalet companies specifically.

We’ve worked a lot in France and generally use sareg.com. They deal with a lot of similar companies, so they can advise not just on tax but on other regulations too.

Costs

In France, it might cost you around €3000 in the first year in accountancy fees to get your company all up and running and to do the first set of accounts.

Getting a head start

It can take a while, especially in the more bureaucratic jurisdictions.

If you find your chalet, then set up your company, then apply for your bank accounts, then your online card processing - you can have lost many months before being able to take your first guest deposit.

Once you’ve made your decision to go ahead with starting a chalet company, it can be worth taking the risk of setting up the company and opening accounts. This means you are ready to hit the ground running as soon as you sign that first chalet.

Regulations and Licences

Again, it depends on your jurisdiction to the rules that apply and this is outside my expertise. I’d advise talking to a good local accountant, who’s experienced in the area. They can be a fount of knowledge and experience.

Heads up though - there’s a lot of rules, you’ll need to plan in due time.

For example, if you want to drive guests from a French ski resort to Geneva, then you need the French licences and the Swiss ones, even though you are just in Switzerland for 10 minutes of the journey. Quick side note - where possible, I generally advise outsourcing the transport of guests as it can be a minefield of regulations and insurance.

In a catered chalet, the licences for alcohol in France can be a sticking point as you need to do the licence holder’s course, which is infrequent. In some countries, you also need licences to serve food and soft drinks. Again, do speak to a good accountant experienced in the area, and they should be able to help.

It all takes time, and I’m sure there are others I’ve not thought of. Get the ball rolling as soon as you can to get through it all before the doors open.

5. Startup costs & cash flow

Startup Costs

A ski chalet company is one of the cheaper businesses to start up.

The first big cost is the chalet deposit, which could be €10,000 - €15,000.

Then there’s the few thousand euros to get your company setup, bank accounts open, card machine, etc, and boom! You are now ready to take deposits.

Cash-flow-wise, a chalet company needs a relatively small amount of working capital. Guests pay their deposits and balance payments a long way ahead, and then your costs come much later on.

So far, you might have spent just €15,000 - €20,000 to get it up and running, then the guest deposits start coming in which funds the business from then on.

The elephant in the room - marketing

All of this though ignores marketing. That’s time-consuming, expensive, or both, depending on what route you choose.

Guests do not appear on their own. We’ll cover marketing a chalet company in more detail below, but just to say which marketing route you pick can be influenced by how much you have to invest.

Some routes like SEO are very expensive upfront but pay back over a period of many years. Using agencies, however, involves very little upfront cash so can be a better choice, cash-flow-wise, to start.

For businesses we work with, in our partnership scheme, we pay all the upfront marketing costs, along with providing loans for things like the chalet deposits, which helps share the startup burden.

Your bills come later

Your main bills start coming in from 1st December onward, as chalet rents, utilities, stock and staff start appearing. All going well, that should not be a problem, as guests should be paying their balances by then and bank accounts should be healthy.

6. Finding guests - how to market a chalet company

Your website

Your website is like your brochure. It needs to be glossy, enticing, and make you dream about wonderful days and nights on your holidays.

But, a lovely new website is like a lovely new brochure that’s sat in your cupboard. Entirely useless if no one sees it.

No, people will not find your website on their own

One more website in Google is like putting one more grain of sand on a beach and hoping someone will find it. Google returns 2.5 million pages for “Chalet in Les Gets”.

You need a plan to get that brochure out of your cupboard and in front of lots of eager skiers.

Getting your website to the top of Google.

That’s called SEO or Search Engine Optimisation. It is what we do. It’s hard and expensive. There’s no secret code or magic fairy dust. It’s just a lot of hard work, including a huge amount of man-hours.

Is it doable for a small start-up chalet company? Well, yes. But only if you already are pretty handy at SEO and have a lot of time and money to dedicate to it.

Long term, SEO provides a good value route to getting in front of your clients. But it’s a huge investment. It’s not something that I’d recommend new start-ups rely on in year one unless you are working with a company such as ourselves, as the cash needed can be crippling.

Fixed cost advertising sites

There are some good advertising sites where you can add your chalet for a fixed price. www.chaletsdirect.com and www.chaletfinder.co.uk are two of the more famous ones.

With these, you can pay a few hundred pounds subscription to have your ski chalet listed for a year. There are no commissions on top.

They are good and can bring you bookings. Be realistic, though. You cannot expect to give someone €300 and get €50,000 of bookings in return. The economics don’t add up. If you can spend €300 and get €5,000 in bookings that’s ~6% spent to find your clients, which I’d consider pretty good value.

In other words, these sites can be good, but you’ll need more than just the two above to fill a season with guests.

Agencies

There are countless agencies, some effective and some not. They take a commission for every week they sell. Around 10% commission is about the norm, though you’ll see variety on either side.

You can go ski-specific, or look at big general travel types like booking.com— though commissions can hit up to 15% there.

Print Media

As one chalet company I spoke with put it: “I’d have had more fun putting my cash in a pile and burning it”.

Which sites should I advertise with?

There are countless, some good and some ineffective. Google is the main source of traffic for a lot of these sites. If they rank well, then they’ll have traffic to give exposure to your chalet.

Do lots of googling for accommodation in your ski resort. The ones that come up are likely the best options for you.

Top Tip: Bring your A-game, you are still competing

Just because you are now paying another site to advertise for you, that doesn’t mean your property will sell itself. You are in competition with every other property on their website and need to make sure yours stands out above the rest.

Look at the competition’s listings, and see what delimits a good ad from a great ad. You should pick your photos carefully, edit the text with great detail, spend the time to fill in every possible piece of information about your chalet.

A half-done ad costs you the same but brings very few bookings.

Finally, talk to the advertising site. They’ll be able to give you tips on what ads perform best.

Google pay-per-click

Google pay-per-click is the ads you see when you search in Google. You bid to have your ad there. Whoever bids the most comes top, and you get charged that bid for every time someone clicks on your ad. They also offer “display ads” too, where your ad appears on 3rd party websites.

It’s a way to turn traffic on, instantly. Having problems getting people to your site? Here’s an instant solution.

It is, however, eye-wateringly expensive. It’s also a very serious skill. It takes a fair bit of specialist knowledge to do it well, and a poorly done campaign will eat your budget in the blink of an eye without bringing any bookings.

You absolutely can run your own campaign, but just be prepared to spend the time to study up first on how to run a great PPC campaign on Google.

Is PPC a viable source of bookings for a chalet company? Yes, but only if it’s done well. The cost means it can be better as a secondary source of bookings to compliment other, cheaper booking streams.

7. It’s all about occupancy rates.

A fixed cost business

A chalet company is mostly a fixed cost business. Your rent, electricity, staff, accountant, marketing, etc, all need paying no matter if your chalet is full or empty. The only variable costs are the food and drink a guest might consume, maybe €90 per person per week? Which is almost insignificant in the scheme of your costs.

Occupancy is key

This means that occupancy is key to making your business profitable. It’s all about bums in beds.

If you have decent occupancy levels, you’ve the turnover to sort most problems. An oven dies? Buy a new one. Wine’s rubbish? Get some better stock in, pronto. But if you’ve empty beds you’ll be in trouble pretty quick.

People book based purely on your marketing

“If you build it, they will come”… is a giant lie. Sorry.

Like it or not, people do not buy your product, they buy your marketing. When they book, they’ve never seen your chalet, tasted your food or experienced your service. In fact, how good your cooking is does not matter at all to bookings. All they have to judge you on is your marketing.

So marketing is now your most important job

If I could give new startup ski companies just one tip, it would be this;

You are now a marketeer. This is your most important job. It’s what you should think about first thing when you wake up and last thing when you go to bed at night.

Everything else on your to-do list is secondary. Once all your marketing jobs for the day are done, then look at the rest.

Because marketing puts bums in beds, and that’s the key to success.

8. What makes customers select your chalet?

Get in front of a lot of eyes

Marketing chalet holidays is a huge numbers game. Maybe 1 in 100 people who land on your website are genuinely interested.

For the rest - their week is already booked, it’s the wrong market level, they need a bigger / smaller chalet, you don’t have a hot tub and on it goes.

But, the right eyes, only. Anything else is a waste of money.

Here’s a rule that surprised me when I first started in business. You’ll never, ever persuade a client to change their mind on a product they want.

“You want to book a self-catered holiday? I can give you this catered holiday for the same price as self-catered, so all the food is free!”

-” No thanks, I was looking for a self-catered chalet, actually.”

There’s no point getting in-front of a skier’s eyes unless they are looking for exactly what you are offering.

• Skiers looking for hotels - no good.

• Skiers looking for self-catered - no good.

• Skiers looking for a neighbouring resort that has half the skiing yet is twice the price - no good.

It’s your job to make sure your marketing is focused on getting in front of only the right people. Anyone else is a waste of money.

No need to reinvent the wheel

You don’t need a unique spin on the chalet holiday. Nor do you need a brand voice that’s different and completely original.

Most skiers already know what they want, and are just looking for a chalet to match that expectation. All you need to do is make sure your product and brand are on point compared to what they are already looking for. There’s no need to reinvent the chalet holiday, in fact, that’ll only hurt your sales.

The big tick boxes first

A lot of skiers have a list of tick boxes your property must hit. Fail one, and you are out. Being extra-good in another category will not compensate.

• All En-suite

• Correct number of bedrooms & beds
  4 and 5 bedrooms are most popular for whole-chalet bookings

• A Hot tub really helps
  Sauna is just a nice addition, but it doesn’t add much to booking levels

• Great Location
  Short walk to the skiing and the village centre. Having to take a ski bus, no matter how easy, will drop the price you can charge. Top-end chalets though negate that with on-call driver services

• Correct Price Point
  You don’t have to be the cheapest, just be in the right area

The quality of the chalet and catering is a touch more subjective. Having an amazing property and service, of course, is a great thing, but it’s less definable than a guest’s tick boxes.

Generally, you need to hit all their tick boxes first to get on their shortlist. After that, you can wow them with your stunning chalet and amazing service levels to seal the deal.

Speed of response

We live in an instant-gratification, 24hrs-on world. Guest expectations are only going up with the speed of response.

Closing your computer on a Friday evening, then not checking emails until Monday morning will not cut it. By Monday morning, your rivals have done 4 emails back and forth with the client, and collected their deposit.

Answering your clients’ questions faster and in more detail gives you a huge leg up on your competition.

9. Break-even point and profitability

When should you break-even?

Let’s assume you get two full-paying adults per room. Yes, you might get some children in a 3rd or 4th bed, but that’ll be mostly limited to school holidays and the profit on them will be much smaller.

A ski season has 16 main weeks (Christmas to Easter inclusive). In higher resorts, you might get a couple of extra weeks on either side, though prices and occupancy will likely be lower.

Rule of Thumb: A catered chalet should break-even with about 10.5 - 11 weeks booked.

If your numbers say you’ll have all your costs covered with 8 weeks’ bookings, I’d suggest you are missing costs or over-ambitious on prices. Equally, if you’ll not break-even until 14 weeks sold, there’s a good chance you’ll not make anything at all.

How to make it profitable #1: Occupancy

Making a catered chalet company profitable is all about high occupancy. How can you get that one extra week sold? How can you get the quad rooms full with 3 or 4 people, not just 2?

Your variable costs are insignificant, maybe €90 per person. If you can get just €200 for that spare bunk bed place, well that’s an extra €110 to your profit margin.

And if you can sell just one more week after the break-even point, then ~80% of that could be towards your profit margin, so it’s well worth spending hard on advertising to get that last sale.

How to make it profitable #2: Commissions

There are commission potentials in a lot of extra things guests book through you.

Ski hire and lift passes are the main earners. After that, there’s ski lessons. The other smaller bits (transfers, massages, etc) are generally just a token addition if anything.

The main commissions are an important part of a chalet company’s profit. Yes, it’s a good bit of extra work to administer, but it’s work that’s essential if you want your business to be profitable.

It’s also, of course, a great extra service for your guests.

10. Winter only, or year-round company?

The winter season is the breadwinner

Winter and summer are by no means comparable seasons in the Alps. Winter is the main breadwinner and should bring in the vast majority of your turnover.

A year-round company could be as extreme as 90% winter and 10% summer in turnover. Summer season is shorter, with lower prices, tighter margins and often lower occupancy.

Chalet rents do reflect this difference.

Our advice? Start winter only

Generally, the time investment to make a summer season work is a false economy. If, by running summer, you are a bit slower on the emails and miss just one booking? That hole in your winter calendar could wipe out your all of your summer profits.

Instead of running a 3-month summer season, you could put those man-hours into improving your winter season. That’ll likely add more to your bottom line than summer ever could.

Only once you feel you are getting the most out of the winters would I recommend considering adding summer on.

11. Common Pitfalls

Designing a holiday for your own subjective tastes

Taste is subjective. You need to match your guest’s dreams and desires, not your own. I’ve seen it many times, where new companies spend money on what they would value in a holiday, only to find out that no one else shares their values.

If I have the best holidays, for the best prices, surely people will book?

That’s the Field of Dreams fallacy - “if you built it, they will come”.

They won’t. Sorry.

It does not matter how good or bad your holidays are. People don’t get to try before they buy with chalet holidays. All that matters, for booking rates, is the quality of your marketing. That’s all the customers have to judge you on.

But if my holidays are incredible, word of mouth and repeat business will take off

Sorry to be the bearer of bad news, but you’ll have gone bust long before then.

Not giving the marketing its due attention

Companies that succeed have one common thread - they know that marketing is the most important thing they do. Every other job on your to-do list should be secondary.

“Hidden Gem” resorts tend to remain hidden

People don’t try to book things they don’t know about, and it’s nigh on impossible to persuade a skier to change their mind once they’ve picked their resort, holiday type, or anything else really.

Go for a resort with a solid fan base. It doesn’t have to be the biggest in the world, but an experienced skier should have heard of it.