Baby, it's cool inside

Most ski chalets are just so naff, says Stephen Wood, and the market seems to agree. Yet there are exceptions, and one innovative British firm is putting on the style

What was the talk of the ski community during the summer? Not the Crystal/ Thomson Specialist Holidays Group's claim that the number of UK skiers had broken through the one-million barrier in 2002/03; nor the less predictable phenomenon of two operators, Crystal and Virgin Holidays, including southern-hemisphere ski resorts (respectively Portillo and Valle Nevado in Chile and Queenstown, New Zealand) in their 2003/04 brochures. Rather, it was the failure of two seemingly blue-chip chalet companies, Meriski and The Ski Company.

Both companies were owned by an Alpine mini-conglomerate, Brown Rock, with investors including Luke Johnson and Hugh Osmond, catering-business high-flyers who are food and drink to analysts and city editors. Quite what brought about the demise of the chalet companies - and of Brown Rock itself - is not clear. One popular theory is that it was the catering side of Brown Rock's operations, in particular its unsuccessful attempt to establish a Pizza Express franchise in the Alps, which brought the whole company down. But prior to the failure - which has seen other assets, including the Dick's Tea Bar chain, pass (somewhat controversially) through Hugh Osmond's hands on their way to the Mark Warner group - both Meriski and The Ski Company were offered as going concerns to most of the major players in the UK chalet business. That none of them wanted to buy suggests that Meriski and The Ski Company were perceived to be going nowhere.

A degree of "asset-stripping" has seen contracts for some of the chalets previously offered by the two companies moving elsewhere, notably to VIP and Total Ski. A smaller version of Meriski has been resuscitated by Handmade Holidays in partnership with its creator, Colin Mathews; and The Ski Company's name, and some of the upmarket chalets in its portfolio, have passed to Descent International. Clearly the UK chalet market is still buoyant enough to feed off a couple of carcasses; but does the demise of two eminent companies suggest a degree of structural change in the ski market?

Apparently not. In ski-holiday terms, "chalet" means serviced accommodation with catering. Theoretically, the same property could serve either as an apartment or - with staff - as a chalet. But chalets traditionally have an excess of scatter cushions and furnishing-fabric patterns, and an "elderly relative" ambience; hence my prejudice against them and in favour of apartments, for their lack of clutter (and the promise of eating out every night). But it would be wishful thinking to detect a trend away from the curiously English concept of the ski-chalet holiday.

Just last week, the pre-eminent chalet-booking agency, Ski Solutions, was noting the increase in availability of upmarket properties in Courchevel 1850, Verbier and Zermatt. And at the same time Andy Sturt, the managing director of VIP and its sister company Snowline (whose combined capacity has increased by 13 per cent for this season), was seeing no sign of decline in the chalet market. "We'll only have 8,500 guests this season, out of a total market that could be 300,000, so the sample size is too small for me to be able to generalise," he said. "All I know is that our occupancy rate is getting better."

In truth, 38-year-old Sturt is an unlikely candidate to be the first to feel a cold draught: he runs an impressive operation. Like many in the ski business, he fell into it, in his case literally. Ski enthusiasts usually spend a few years as an instructor or guide before setting up a company which, they hope, will keep them in the mountains for a fruitful working life. Sturt tore a cruciate ligament after he had done just one season, and had saved only £300. "I knew that to set up a business finding properties in the French Alps for UK buyers, I'd need more than that," he says. "So I started sanding and varnishing balconies for Morzine hoteliers, and managed to save another £700 by the end of the summer of 1988. I came back to the UK, went to Barclays Bank, and they lent me £5,000 - so I had enough to buy an electronic typewriter, a fax machine, and a minibus with which I could do airport transfers if things went badly."

Finding properties was easy. Thanks to his excellent French - learned as a child when his family lived in Algiers - he soon got the hang of the legal and financial issues of dealing in property. His investors often asked him to arrange the finance and conversion of properties, and the leasing of them to UK tour operators; soon he was taking leases himself, managing chalets and letting them to UK holidaymakers.

By the early 1990s Sturt had set up an office in London to do all the marketing, accounting and administration of a chalet-rental business. Eventually, he could devote himself largely to "the fun bit: renovating and building properties. And now we have the finance to do property development ourselves." This season sees the appearance of the Dakota and Nebraska chalets - the first to be built from the ground up by his company - in the brochure for Snowline, the value-for-money brand which is just a notch down from VIP.

Most UK operators take renewable, three- to five-year leases on chalets in the French Alps from their owners. Sturt does have a handful of chalets leased on that basis; but his preferred operating model is very different. "In the perfect example," he says, "we find a plot of land, build on it, lease the property back to ourselves to auto-finance the development with rental income, and then in 15 years collect the keys to the property from the bank." For a three-chalet scheme opposite the Rocher de Bellevarde in Val d'Isère, on which work started last week, Sturt has formed a partnership with the landowner, who after 15 years will get a £3m chalet in return for contributing his £250,000 plot.

Alternatively - and, so far, more frequently - Sturt participates in a property development, designing it for VIP or Snowline clients and taking a long-term lease, usually of at least a dozen years. Both strategies ensure good interior design, a stable, tax-efficient investment and predictable, index-linked costs in the long term.

Switching to the customer's end of the telescope, I asked Sturt what sets VIP apart from other upmarket chalet companies. The staff, he suggested, pointing out that their average age this season is over 31 years. "If you have a crap chalet and great staff you'll get nothing but complimentary letters, but a great chalet with crap staff will provoke nothing but complaints." The prices, too: "There are so many tour operators that there's always a queue for a good chalet in the main French resorts, so rents are going through the roof; but we have stable rents often set years ago, so we can peg our prices down."

Only when pressed did he mention the chalet interiors, and then merely to say that "there are a lot of good chalets out there, but there's probably no one else with the same consistency of product". Considering that the beautifully spare interior of VIP's The Farmhouse in Val d'Isère was enough to persuade even me that chalets can be highly desirable, Sturt was underselling his design work. In the VIP brochure, a Sunday newspaper is quoted as saying of The Farmhouse that "some day... all chalets will be built this way". More wishful thinking, I fear.

VIP: 020-8875 1957; www.vip-chalets.com. Snowline: 020-8870 4807; www.snowline.co.uk