Niall Bates and his wife Helen left behind their London banking jobs in early 2007 and moved to Cannes. They felt the property market was seriously undervalued and started buying properties to rent out short-term. Chic Gîtes was born.
What is your business and how long have you been trading?
Chic Gîtes is a property rentals business in Cannes. We buy, renovate and then rent out apartments in the centre of town. We set up the company in March 2007 and opened the doors to our first guests in July 2007.
Did you do the same trade either in or out of France before?
No, not at all. Both my wife and I worked in banking in London, so it has been a very steep learning curve since arriving in France. We’ve gone from barely being able to change a plug to installing bathrooms, kitchens and so on.
What qualifications do you need to do this kind of work?
For the rental side of things, none at all, which is why there are so many rental agents in Cannes – and with the internet there is no longer even a need to have an office here. For the renovation work (which we do mainly ourselves) you do need certain skills, but we have learnt these on the job from the professionals.
Why did you think it would work?
The initial draw was the relatively cheap price of property in Cannes, so we targeted that sector immediately. When we started looking into it in more depth, the huge demand for beds in Cannes around the conference periods pushed us towards the rental market: although the film festival is the biggest and best-known, there are about seven or eight significant industry conferences during the year in Cannes, most of which bring more people than the hotels can cater for. This demand was traditionally catered for by people renting out their apartments for a few weeks of the year. But we saw there was a market for the business traveller looking for higher-end properties and facilities. That is where we step in, providing central, stylish and modern apartments equipped with wifi, air-conditioning, printers etc.
What type of business set-up are you and do you have any employees?
We own our properties in an SCI (société civile immobilière) and run the rental business through a SARL. We have no employees.
Would you be brave enough to tell us your income?
We’re still in early days trading and are still adding to our portfolio of properties, but suffice to say we are already earning enough for the three of us to live comfortably (we have a 21-month-old son, Charlie).
What has surprised you?
How relatively low the effective tax rate is that we end up paying per euro the company earns. As a family of three, we have 2.5 tax parts, which significantly reduces the rate paid, and the corporate tax rate on the first €38,000 is just 15 per cent.
How do you market yourselves?
We have our own website at www.accommodationcannes.com where we market our apartments. Our main marketing tool is Google Adwords, the pay-per-click system using keywords. We find this gives us very well targeted advertising and is certainly the most efficient method we’ve found. In the past
18 months we’re starting to find repeat customers and word of mouth becoming a bigger and bigger slice of our income; this year it will account for nearly 60 per cent of our turnover and is already shaping up to be even higher next year.
Who is your market?
Our market is split in two. For conferences, it is corporate clients, mainly from the UK and the US. For summer it is mainly northern European families with young children.
Looking back, what was your biggest mistake and your biggest success?
Our biggest success was undoubtedly the very specific choice of market within the property sector: the central Cannes property and rentals markets have probably fared better than any in Europe through the property crisis of the past three years. Our biggest mistake was trusting a dodgy plumber, despite a warning from a previous client of his. He then went on to flood a whole building and then disappeared to Italy with the job only half-finished and unfortunately most of the money already paid.
Did you do a business plan?
Once we worked out the exact market we wanted to operate in, we had a fairly specific plan in mind, if not written down. We targeted six apartments from the start, as we knew that was a number we could manage ourselves without having to employ agents, cleaners and so on. We built up the company at a relatively slow rate so that we were flexible enough to change tack a little, based on the experience we gained from each type of apartment we opened.