Club Med is reaping the benefits of its move upmarket and is not ruling out the entry of new investors
2023-09-07 15:00:00
For the first time, Club Med achieved half-yearly revenue of more than 1 billion euros (1.061 billion), up 32% compared to the same period in 2022 and 20% compared to 2019, before the pandemic. Operating profit was 159 million euros.
And the trends for the second half are positive: reservations are up 6% compared to 2022 and 21% compared to 2019.
“This confirms that the move upmarket works, that it brings significant and high results, the operating margin is very high”, welcomed during an interview with AFP the president of Club Med Henri Giscard d’Estaing. .
Rather reassuring results while the financial vagaries a few months ago of Fosun, which has owned Club Med since 2015 and is one of the largest conglomerates in the Chinese private sector, had raised some concerns about the future of the French subsidiary.
“It is quite clear that Fosun intends to remain the majority shareholder of Club Med”, reaffirms Henri Giscard d’Estaing.
But “an opening of Club Med’s capital to minority strategic partners could be envisaged”, adds the chairman, “and this with the eventual objective of strengthening Club Med’s development and growth potential”.
It is by resolutely targeting the wealthy clientele that Club Med has turned the corner, gradually eliminating clubs with limited services to multiply luxury resorts, with major renovations and site openings.
“The move upmarket has been achieved, 97% of Club Meds are (today) either top of the range or very top of the range. This is 11 points more than in 2019”, says Mr. Giscard d’Estaing .
The group has 66 Club Meds and 25,000 employees. The clubs of the “Exclusive Collection”, where a stay can reach several thousand euros, saw their turnover increase by 35% in the first half and the number of customers by 22%.
local clientele
By 2025, Club Med plans to open 17 new hotel complexes and expand or renovate more than 10 clubs.
“What also worked was the geographical strategy”, emphasizes Henri Giscard d’Estaing. “We were able to benefit from the first half of 2022 from the recovery in America and then, in the second half, in Europe. In the first half of 2023, we benefited from the continuation of a strong momentum in America, a good momentum in Europe and the recovery of our business in Asia”.
This “very large geographical location of the Club is a way of protecting us against geopolitical or economic hazards”, according to Mr. Giscard d’Estaing.
And in the countries where it is present, the group, 40% of whose customers come from France, seeks to capture local customers. “This is an evolution in our strategy. The pandemic has forced us to strengthen our local presence”.
Club Med President Henri Giscard d’Estaing in Beijing, April 5, 2023AFP/Archives / LUDOVIC MARIN.
“This has been particularly the case in Asia”, explains the president, citing as an example Malaysia, whose borders have been closed for three years. “There were 20% of Chinese customers in this Club Med. We managed to replace this Chinese clientele with Malaysian customers. We did the same thing in Brazil”, according to Henri Giscard d’Estaing.
The mountain is another “strategic focus” for Club Med, which has opened new resorts in the Alps, Canada and Japan. Last winter, turnover in the mountains increased by 45% over one year and the number of customers by 10%.
The group opened the doors of seven Club Meds in the Alps this summer. “Our goal is to continue to develop this activity. Next year, eight Club Med will open in the summer” in the Alps, he added.