Investment firm Fosun Group to build empire of holiday attractions for Chinese tourists
Conglomerate eyes China’s burgeoning leisure sector as it acquires tourism-related assets
With Chinese travellers increasingly demanding as much luxury on holidays as their first-world counterparts, a local investment conglomerate is seizing opportunities for overseas acquisitions to build an empire of recreational attractions for Chinese tourists around the world.
Shanghai-based Fosun Group, founded by billionaire Guo Guangchang, is eyeing a chunk of China’s 3 trillion yuan (HK$3.8 billion) domestic tourism market, having taken over a cluster of international brands, including French resorts chain Club Méditerranée.
Guo, 48, wants to bring more luxury resorts and holiday attractions into China.
“It’s the right time to send a loud message to the market that Fosun is charting a resolute course into the leisure sector,” he said. “Fosun is by no means a small player, and we are determined to build a series of top brands to serve the Chinese people.”
Fosun bought 5 per cent of British travel firm Thomas Cook in March, shortly after it won a bidding war to control Club Med. Last month, it secured a 20 per cent stake in Canadian entertainment firm Cirque du Soleil, taking it another step further in its ambition to transform itself into a pioneer of China’s fashion, health-care and tourism sectors.
Fosun is China’s largest non-state-owned investment conglomerate. Its businesses comprise real estate, pharmaceuticals, insurance, commodities, steelmaking and tourism.
Describing Fosun’s mad scramble for assets abroad as a way of combining global resources with Chinese growth, Guo attributed his company’s voracious appetite to the rising demands of the Chinese middle class.
Chinese tourists have in recent years shifted their focus from sightseeing to seeking fun and luxurious comforts as wealthy households splash out thousands of dollars for top-class entertainment and hotel services on their holidays.
The market size of China’s domestic travels climbed 16.3 per cent to 3.1 trillion yuan last year, according to the China Tourism Academy. Chinese spending on outbound travels rose 1.2 per cent to US$155 billion.
Describing himself as a student of American business magnate Warren Buffett, Guo said he believed his insights into Chinese consumers’ psyche could bring great opportunities for the country’s economy.
“China’s mammoth 1.3 billion population could help it surpass the United States in many areas,” the tycoon said. “It will be a gargantuan market when the bulk of Chinese people actively seek happiness and fashion.”
Fosun plans to invest 100 billion yuan in resorts and tourism-related businesses across the country, giving affluent Chinese a taste of luxury on domestic tours.
In late 2013, the company announced it would develop the 10 billion yuan Atlantis Sanya resort in coastal Sanya city in Hainan province. It teamed up with Kerzner International, owned by South African tycoon Sol Kerzner, to build the resort.
Outside China, the conglomerate paid 958 million euros (HK$8.15 billion) to acquire Club Med, £91.9 million (HK$1.1 billion) for the stake in Thomas Cook, and US$300 million for its share in Cirque.
Fosun’s investments into global firms could help it expand its presence in China.
Club Med now has three properties in China and plans to make the country its second-largest market, after France. Fosun is also helping the circus troupe Cirque make its foray into the Chinese market.
“We will continue to invest in properties that have synergies with our tourism businesses,” Guo said. “The market potential in China will eventually propel our acquired global resources to give more happiness to the Chinese people.”