A simple cost breakdown will help you to manage your ski chalet rental business efficiently from its inception. Below, we’ll run through the key financial considerations for a self-catered ski chalet business.
You’ll then be able to accurately estimate your operating costs per booking. This will allow you to calculate your all-important minimum weekly pricing, to ensure that you not only cover costs but also make yourself a tidy profit!
What are your personal goals?
Of course, every owner will have their own targets when it comes to budgeting for a ski chalet rental. Some will want the chalet to “wash its face”, whilst they get the benefit of using it too. Others will see it as an investment opportunity first and foremost and focus heavily on high yield and returns. In our experience, we find that the majority of owners will fall somewhere in between these two extremes.
So, you’ll need to consider your ski chalet running costs, as well as overheads, fixed and variable costs. Gaining an understanding of these will help inform those crucial minimum pricing decisions. Once you’ve done so, you will then be able to make further informed choices on where you can and can’t be flexible. For example:
- Does it make sense to have special offer pricing for repeat guests?
- Are there some weeks you simply can’t afford to budge on price?
Let’s take a look at a case study from one of our owners to help you get a clearer idea.
Please note – prices for cleaning and laundry differ according to ski resort and the type of local management solution on offer – these are guide prices only.
A cost breakdown: renting out a ski chalet for 8 people paying 2500€ for one week
| Variable costs per stay | ||
| Guest Management | 150€ per booking | 150€ |
| Cleaning (6 hours) | 25€ per hour | 150€ |
| Sheets (4 double beds) | 25€ per bed | 100€ |
| Towels (8 bath, 8 hand) | 10€ per pers | 80€ |
| OVO service fee | 10% of the booking | 250€ |
| Water, electricity | 30€ | |
| Welcome gift | 20€ | |
| Total | €780 |
Fixed costs:
To estimate fixed costs, divide the total amount of your annual fixed costs by the number of weeks occupied (including weeks when you will stay at the property with your family).
Here’s an example for a property occupied for 25 weeks a year:
| Annual fixed costs | Occupation | Fixed costs per stay |
| 8000€ | 25 weeks | 320€ |
The addition of variable costs + fixed costs gives you an estimate of the amount of expenses to cover during a stay (1100 € in our example). So, your profit on a booking worth 2500€ would be roughly 1400€.
However, make sure to remember not to consider fixed costs when deciding on your minimum price, because you will incur the fixed cost whether you have bookings or not.
Remember, the minimum price you offer for a stay must be greater than the total amount of your expenses to generate a profit. Also note that prices and costs will inevitably vary depending on the resort.
Minimising costs
With this in mind, you might be thinking: what’s the best way to keep my outgoings as low as possible? Do bear in mind here that at the higher end of the market, you want to avoid cutting corners.
Instead, aim to strike the right balance between controlling expenditure and providing guests with what they expect. For instance, we always recommend owners provide a welcome basket, toiletries and cleaning materials in their properties. Although this is an extra cost, small touches like this massively increase your chances of receiving positive feedback and repeat bookings. Check out our blog on the typical small touches we know our guests appreciate from feedback.
Another important note: be mindful of Covid related increased costs at this time. Things such as extra time required, changes in cleaning procedures and expenses such as PPE and professional cleaning products should all be factored in.
We hope this breakdown of ski chalet overheads, fixed, variable and running costs has been helpful to you!
Browse properties we work with
Now for the fun bit! Head on over to our rental calculator to estimate what your income could be.
Once you have an idea of how much your project may cost to run, why not run through our destinations?
Here you can find out at what pricing has been set for the type of ski chalet or apartment you might like to own. You’re one step closer to the dream!
