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Fosun Group

Chinese-owned Club Med to open 15 new resorts by 2019

PUBLISHED : Friday, 27 January, 2017, 1:23am
UPDATED : Friday, 27 January, 2017, 1:23am

Holiday company Club Med, owned by Chinese group Fosun, plans to open 15 new resorts worldwide in the next three years, including one in China and one in Japan in 2017, and to upgrade nine of its existing sites.

In France alone, still Club Med’s biggest market, the group plans to open one new mountain village resort each year until 2019, Chief Executive Henri Giscard d’Estaing told a news conference.

“The club has resumed its march forward and is now accelerating,” Giscard said, reflecting a new optimism two years after the company was finally bought out.

Fosun Group, China’s largest private conglomerate, took control of Club Med in January 2015 after a fierce battle lasting nearly two years with Italian tycoon Andrea Bonomi, the longest takeover fight in French corporate history.

Fosun International pivots from asset buyer to seller in bid to lower leverage

Club Med was seen as overly dependent on Europe, home to 70 per cent of its revenue and sluggish economic growth. Fosun offered it a chance to accelerate a strategy focused on moving further upmarket and expanding abroad, notably in the booming Chinese market.

Club Med now operates 68 holiday villages worldwide, with some 77 per cent of its resorts labelled premium or luxury compared with 55 per cent in 2010, when Fosun bought an initial 7 per cent stake in the company.

China is its second largest market after France with 200,000 customers, up from 59,000 in 2010. This compares with 406,000 customers for France, a number broadly unchanged from 2015.

Club Med has five resorts in China, in Yabuli, Guilin, Zhuhai Dong’ao Island, Sanya, and Beidahu, and will open a Joyview branded resort in Anji this year, Giscard said.

Designed to offer Chinese urban consumers the opportunity to enjoy short holiday breaks, Joyview resorts are located close to China’s major cities. Anji is relatively close to Shanghai.

Club Med, which is no longer listed on the stock exchange, reported a 1 per cent rise in clients worldwide to 1.26 million in 2016.

It also generated a 15 per cent rise in Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) despite a 1 per cent decline in global revenue to 1.469 billion euros.

The revenue decline reflected a 3 per cent drop in revenue from Europe, where political turmoil in Turkey and North Africa hurt business. Revenue however rose 6 per cent in Asia and 4 per cent in America.

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