…
Fiscal 2011 is shaping up favorably with a Club Med that now generates underlying free cash flow, while also recording double-digit growth in winter bookings and simultaneously opening two new villages – a series of events that we haven’t seen for a long time. We’re confident that we’ll meet our objectives for year-end 2012, with two-thirds of our capacity in the 4 and 5 Trident segments and direct sales that account for 60% of the total. These goals should enable us to generate Village EBITDA margin of nearly 10%. Sales in China increased by over 40% in 2010 and the country is expected to become our second-largest market by 2015, led by the opening of five villages and the support of our new shareholder Fosun.
Club Mediterranee reaffirms its objectives
- Two-thirds of the portfolio in the 4 and 5 Trident segments by year-end 2012 Club Med has stepped up the pace of development while pursuing the asset light strategy. Following the December 2010 openings of Sinai Bay in Egypt (4 Trident village with a 5 Trident Luxury Space) and Yabuli in China (4 Trident), a number of openings are scheduled for 2012: Valmorel in France (4 Trident village with a 5 Trident Luxury Space) and Cefalu in Italy (5 Trident).
As for renovation projects, Sandpiper Bay in Florida, Yasmina in Morocco and Sahoro in Japan will be refurbished and upgraded to 4 Trident in 2011. Phuket in Thailand will be renovated in 2012.
Club Mediterranee also announced the sale of the Sestriere village and the closing of the Metaponto village, both in Italy. It is also looking to dispose of a number of unprofitable 2 and 3 Trident villages (representing 6% of total current capacity) that no longer fit with the new positioning.
- 60% of direct sales in 2012
The aim is for the direct distribution model to generate over 60% of revenue by 2012 compared with 58% in 2010. This model helps Club Med distribute its offer more efficiently even as it continues to drive
down costs.
In 2010, the new online booking site was deployed in 27 countries with sales rising by 10%. In addition, the Club will leverage its strengthened direct distribution network and worldwide customer database to deploy an ambitious new CRM (Customer Relationship Management) program in 2011.
Achieving these two objectives while also continuing to improve the business model could help generate Village EBITDA margin of around 10% in 2012.
With the support of its shareholder Fosun, Club Med is reaffirming its commitment to making China its second-largest market in 2015 with a target of 200,000 customers.
Deployment of Club Med’s strategy in China is well underway. That strategy is now supported by Fosun, a privately held Chinese company that currently holds a nearly 10% equity stake and strengthens the Club’s capacity for development in China, which is to become the Group’s second-largest market.
In 2010, the number of Chinese customers increased by 42% over the previous year, with 32,000 Chinese customers vacationing in Club Med villages in the Asia-Pacific region. This figure rises to 60,000 when customers from the entire Greater China area are included. Club Med’s goal is to continue increasing the number of Chinese customers to a total of 200,000 in 2015.
To step up recruitment of new customers, Club Med plans to open five villages in China over the next five years, of which the first is the Yabuli mountain village that was successfully brought on stream in late November.
At the same time, Club Med is continuing to strengthen its sales and marketing operations with the installation of Club Med Corners in upscale travel agencies in China’s main cities.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
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