![[PR] PR_Ascott and Vimut Hospital_2024](https://www.traveldailynews.asia/wp-content/uploads/2024/04/PR-PR_Ascott-and-Vimut-Hospital_2024-400x265.jpg)
Affected by the global public health measures and travel restrictions caused by the outbreak of COVID-19 in 2020, the group’s business volume from tourism operations fell to RMB6,947.7 million, a year-on-year decrease of 53.2%
Hong Kong – Fosun Tourism Group (“Fosun Tourism” or “the Group”, Stock code: 1992.HK), the world’s leading leisure-focused integrated tourism group, announced its annual results for the twelve months ended 31 December 2020 (“the reporting period”).
Results Highlights：
- Affected by the global public health measures and travel restrictions caused by the outbreak of COVID-19 in 2020, the group’s business volume (at constant exchange rate) from tourism operations fell to RMB6,947.7 million, a year-on-year decrease of 53.2%. Adjusted EBITDA decreased to RMB193.8 million, and loss attributable to equity holders was RMB2,568.1 million.
- The Group’s resort and destination operation performed strongly in the second half of 2020. The revenue of Club Med in China grew 35.3%[1] in the fourth quarter of 2020 compared to the same period of 2019. In the second half of 2020, the revenue of Atlantis Sanya grew against the downside industry trend, and increased by 36.5% compared with the same period of 2019, and adjusted EBITDA for the full year reached RMB607.8 million, which reached a record high since the opening of Atlantis Sanya.
- The Group effectively optimizes operation costs by implementing strict cost control measures and policies. The total operation cost of Atlantis Sanya decreased by RMB92.3 million in 2020 compared with that in 2019. And the fixed cost of Club Med in 2020 decreased by 31.9%, the fixed cost saving in 2020 was approximately RMB2,123.4 million compared with that in 2019, and the fixed cost reduced by 41.1% in the 10 months directly impacted by COVID-19 compared to that in the same period of 2019.
- The Group raised RMB6.8 billion through Atlantis Sanya Commercial Mortgage-Backed Security (“CMBS”). Club Med received a French government-guaranteed loan of approximately EUR180.0 million (equivalent to RMB1.444 billion) , which enabled the Group to achieve abundant cash reserves and enhance liquidity.
- Two tourism destination FOLIDAY Town projects have been progressing well, and the presale activities of saleable property units of Taicang and Lijiang FOLIDAY Town have started.
- The “Thomas Cook Lifestyle Platform” was newly launched in July 2020. As of 31 December 2020, the platform achieved a business volume of approximately RMB183.7 million and had 549,000 downloads.
- Club Med continues to tap into new markets and plans to open 16 new resorts worldwide by the end of 2023, half of which will be located in China.
- Since January 2020, the outbreak of Novel Coronavirus Pneumonia Pandemic (“epidemic” or “COVID-19”) has swept across all countries and regions. Large-scale public health measures and travel restrictions have significantly impacted the hotel industry and cultural tourism industry. All Club Med resorts were temporarily suspended for a certain period of time during the reporting period, which significantly impacted the Group’s operating revenue. During the reporting period, the Group’s business volume of tourism operation decreased to RMB6,947.7 million (at constant exchange rate), representing a year-on-year decrease of 53.2%. The Group’s revenue decreased to RMB7,060.3 million, and adjusted EBITDA decreased to RMB193.8 million.
Core business recovery trend led the industry, construction and pre-sale of FOLIDAY TOWN proceeded well
In the first two months of 2020, the Group’s resort operation experienced a strong performance as a result of popularity in both ski resorts and sun resorts, with the business volume of resort operation, increased by approximately 8.0% and the EBITDA increased by over 20.0% compared with the same period of 2019. However, due to the global outbreak of COVID-19, Club Med resorts were temporarily closed for a certain period of time during the reporting period. Due to the decrease in the resort capacity by 54.7% in 2020 compared with that of 2019, the business volume of Club Med reached RMB5,605.6 million (at constant exchange rate) in 2020, representing a decrease of 58.4% compared with that of 2019. Facing the epidemic, the Group played to the score and implemented a number of safety measures to ensure the health and safety of customers and employees, controlled cost, obtained government-guaranteed loans to relieve the financial stress, and actively reopened certain resorts during the summer when the COVID-19 relatively eased in the summer. In July and August, the capacity of Club Med resorts reached 40.6% of that of the same period in 2019, with the occupancy rate achieved 69.4%[2]. In addition, the epidemic has been gradually under control in China since March. With the increase in Chinese market demand and thanks to the Group’s strong product power, the business volume of Club Med resorts in China increased by 35.3%[1] in the fourth quarter of 2020 compared with the same period of 2019, achieving record-high results. As of 31 December 2020, 23 Club Med resorts were open. In December 2020, the resort capacity recovered to approximately 37.9% of that in 2019.
Since 2021, the second wave of the epidemic is still raging across the world, and the Group’s global resort operation still faces significant impact and uncertainty in the first half of the year. However, the anti-COVID-19 vaccination has gradually started globally, which will prevent the spread of the epidemic. The group has begun to prepare for the business rebound starting in the second half of 2021. As of 18 March 2021, the Group has 18 resorts open and the resort capacity reached approximately 36.7% [3] of that of the same period in 2019.
Regarding the outlook of the Group’s post-pandemic resort business recovery, Mr. Henri Giscard d’Estaing, the Vice Chairman and Deputy CEO of Fosun Tourism Group, said, “In 2020, we have been facing the very severe crisis of tourism and travel resulting from COVID-19. We reacted strongly to it with massive cost-saving while preparing the future rebound. In the second half of this year, we should experience a strong rebound momentum as we know that families are absolutely willing to go on holidays. We are convinced of the capacity of Club Med to rebound strongly thanks to the strength of our business model, our upscale strategy, globalization strategy, Happy Digital strategy, and our ability to gain market shares. Meanwhile, We expect to reinforce our position as the global leader of premium all-inclusive holiday resorts for families and active couples, with a winning position in China, the largest touristic market in the world, thanks to efficient synergies with FOLIDAY. “
In 2020, the number of tourists in mainland China was 2.879 billion, down by 52.1% year-on-year, and domestic tourism revenue was RMB2.23 trillion, down by 61.1% year-on-year[4], according to the sample survey results of the Ministry of Culture and Tourism, PRC. During the reporting period, the operation of Atlantis Sanya was severely impacted by the outbreak of the epidemic. The business volume decreased 6.5% year-on-year to approximately RMB1,226.7 million. During the reporting period, the number of visitors visiting Atlantis Sanya decreased from approximately 5.2 million to approximately 4.6 million for the same period of 2019, while the adjusted EBITDA for 2020 increased by 7.6% year-on-year to approximately RMB607.8 million, outperforming the industry downside trend. From February to March 2020, certain facilities of Atlantis Sanya had to be temporarily closed in accordance with relevant government policies. With better control of the epidemic in China, and thanks to the Group’s outstanding product power and sound recovery on the demand side, its tourism destination business has been recovering smoothly: The business volume of Atlantis Sanya grew against the industry downside trend in the second half of 2020 by 36.5% compared to that of the same period in 2019, the room revenue increased by 41.3%, and the occupancy rate increased by 14.7 percentage points to 89.7%, demonstrating the Group’s operational ability to quickly gain market share after the outbreak of COVID-19.
In 2020, The Group has steadily pushed forward the construction of two projects of “FOLIDAY Town” brand. In July, Lijiang FOLIDAY Town has obtained a presale permit for saleable vocation inns and residential units which occupy a construction area of approximately 28,000 square meters, and presale activities have started in late November 2020. In July, Taicang FOLIDAY Town has obtained a sales permit for a construction area of approximately 100,000 square meters, of which the presale activities of approximately 51,000 square meters that represent 434 sets of saleable units have started, and as of 31 December 2020, 250 sets have been presold, and as of 18 March 2021, the number reached 389.
Ensure Sufficient Cash Liquidity and Strict Cost Control
During the reporting period, the Group’s financial position was stable and healthy, by expanding financing channels, improving financial structures, and ensuring abundant cash reserves, the Group was able to protect the existing business development even under the impact of the epidemic, and to obtain accelerated development opportunities post-pandemic. In mid-March 2020, the Group set up the Atlantis Sanya Asset-backed Special Plan and issued CMBS of approximately RMB6.8 billion with a coupon rate of 5% and a term of 24 years. In June 2020, the group received a long-term low-interest loan of approximately EUR180.0 million (equivalent to RMB1.444 billion) guaranteed by the French government.
At the same time, the Group implemented strict cost control measures and policies to effectively optimize operating costs, including reducing human resource costs, optimizing energy and other fixed costs, and reducing costs and expenses of marketing and other activities. By cutting human resource costs, adjusting rent costs, as well as canceling and delaying capital expenditures, the fixed cost of Club Med reduced by 31.9% in 2020 compared to that of 2019, the total fixed cost saving in 2020 was approximately RMB2,123.4 million, and the fixed cost in the 10 months directly impacted by the COVID-19 reduced by 41.1% compared to that of the same period in 2019, and the human resource costs and capital expenditures of Club Med in 2020 decreased by 34.1% and 35.0% year-on-year respectively. The total operating costs of Atlantis Sanya decreased by RMB92.3 million compared with that of 2019, and human resource costs and energy costs decreased by 17.0% and 17.8% year-on-year respectively.
Actively explore market opportunities and promote the synergic development of the FOLIDAY ecosystem
With the progress of vaccination globally, Club Med will continue to explore new markets this year and plans to open 16 new resorts worldwide by the end of 2023, half of which will be located in China. In addition, to expand the Chinese market, Club Med has expanded markets in the third and fourth-tier cities. The number of tourists visiting Club Med China has risen from 20,000 in 2010 to nearly 282,000 in 2019, Chinese tourism contribution is the second after France, and the number of tourists visiting Club Med China is expected to rise.
The Group has acquired the hotel brands of Casa Cook and Cook’s Club in November 2019 and is now actively developing projects in different regions. As of 18 March 2021, the Group has entered into franchise agreements with 13 hotels along the Mediterranean Coast, and also entered 3 new hotel agreements in China. The Group plans to further expand Casa Cook, Cook’s Club, and other derivative brands, if any, in the world, with a view to achieving a worldwide presence of not less than 30 hotels (including the hotels already open) by the end of 2023.
On 18 July 2020, the Group officially launched and has operated “Thomas Cook Lifestyle Platform” in China. In November 2019, the Group completed the acquisition of Thomas Cook, a famous travel agency brand with a history of nearly 180 years. The Group aims to further strengthen the channels and ability of reaching customers leveraging the extensive brand awareness and profound influence of the Thomas Cook brand. By integrating online and offline superior resources, the Group created a vertical FC2M ecological chain from offline scenario resources to product content, directly serving its customers. The platform achieved massive business volume and users rapidly in the five months since its operation in China. As of 31 December 2020, the platform had a business volume of approximately RMB183.7 million and 549,000 downloads, with 250,000 monthly active users (MAU). In September 2020, Thomas Cook UK started its trial operation as an online travel agency, which further strengthens Fosun Tourism’s channel building and diversified tourism products creation in Europe. As of 18 March 2021, the platform had accumulative app downloads of over 752,000, and the MAU of the Thomas Cook Lifestyle Platform reached 372,000. From 1 January to 18 March 2021, Thomas Cook China and UK achieved a cumulative GMV of over RMB77.1 million. The Group indicated that it will release a variety of products with platform-exclusive experience in 2021, create a variety of different lifestyles, and bring value-added synergies within the Group’s FOLIDAY ecosystem.
Jiannong Qian, Chairman and CEO of Fosun Tourism Group, said: “In 2020, the unexpected epidemic brought heavy losses to the global tourism industry, but it was in such grave situation that the Group demonstrated strong anti-risk capabilities. For one thing, in 2020, the Group expanded financing, reduced costs, and improved efficiency to ensure the gradual recovery and development of business operations. For another, with excellent business model and strong product power, Fosun Tourism drives the recovery of the industry with a new momentum. With the orderly progress of vaccination globally, especially in the post-epidemic era, the hotel industry and cultural tourism industry are recovering in an orderly manner. The next five to ten years will be a golden period for investment and expansion in the industry, and companies including Fosun Tourism are facing new opportunities. Committed to building a vertical ecosystem in the field of cultural tourism, Fosun Tourism will deeply cultivate its future growth momentum, further integrate valuable resources and consolidate market position to repay our shareholders with satisfying business performance.”
Notes:
[1] The data included the onsite sales within the resorts.
[2] The 69.4% occupancy rate is based on limited capacity in certain regions due to requirements of social distance and sanitary measure.
[3] As of March 18, 2020, excluding 7 resorts in China, the Group’s overseas resorts are still operating normally.
[4] Ministry of Culture And Tourism of the People’s Republic of China: Domestic tourism data in 2020
https://zwgk.mct.gov.cn/zfxxgkml/tjxx/202102/t20210218_921658.html
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
