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Consolidated revenue for first-quarter 2011 (1 November 2010 – 31 January 2011) increased by 14.6% as reported to 337 million euros, from 295 million euros in the prior-year period.
– At constant exchange rates, Resort revenue rose by 9.5% compared with first-quarter 2010, reflecting the net gain in customers and an increase in the average price.
– Capacity was up 4.5%, of which 6 points in 4 and 5-Trident Resorts with the opening of the Sinai Bay and Yabuli, the marketing of the Albion villas and the reopening of Cap Skirring following renovation.
– In the first quarter, the Group recorded a net gain in customers with an overall increase of nearly 9% versus first-quarter 2010, representing 21,000 additional customers. For 4 and 5- Trident Resorts, the increase came to 22%, or 36,000 additional customers for the most upmarket Resorts, which accounted for 74% of all customers.
2. First-quarter highlights
– Further improvement in operating margin
The first quarter saw a sharp improvement in profitability with Resort EBITDA margin rising by more than two points.
– Fosun increases its equity stake to nearly 10%
Fosun, the privately held Chinese company, increased its equity investment last November to 2,801,569 shares, representing nearly 10% of Club Med capital and voting rights. The increase reflects Fosun’s commitment to supporting Club Med’s development in China.
– Redemption of 2010 OCEANE convertible bonds
The OCEANE convertible bonds issued in November 2004 for 150 million euros were fully redeemed at maturity on 1 November 2010.
Recent developments
The first quarter saw the opening of new 4-Trident Resorts – Sinai Bay in Egypt and Yabuli in China – both of which are operated under management contracts. To be upgraded from 3 to 4 Tridents, Sandpiper Bay in Florida is undergoing a major renovation that will continue in 2011. These developments are in line with the objective of having 4 and 5-Trident Resorts account for two-thirds of total capacity by year-end 2012.
Exiting Resorts that no longer comply with upmarket standards
As part of the project to exit non-strategic and unprofitable Resorts that represent 6% of total
portfolio capacity, Club Med terminated the lease on the 2-Trident Athenia Resort in Greece, which was returned to its owner at end-February, and did not renew the lease on the 3-Trident Resort in Les Menuires, which is to remain in operation through the end of the season.
Launch of the Valmorel property program
On 9 February 2011, Club Mediterranee began marketing the first chalet-apartments to be built in
Valmorel, the future 4-Trident Resort that will include a 5-Trident Luxury Space.
The situation in Tunisia and Egypt
Given recent events in Tunisia and Egypt and in line with recommendations from French authorities, Club Med decided to close Djerba la Douce (the only Tunisian Resort open at this time of the year), as of 15 January, and Sinai Bay, El Gouna (both operated under management contracts) and Luxor in Egypt, as of 28 January. Club Med has decided to reopen Djerba la Douce and Sinai Bay on 26 February and El Gouna on 5 March 2011. The around 5 million euros to 8 million euros impact of these events will not preclude another significant rise in Resort Operating income over the winter.
As of 26 February 2011, bookings (expressed as revenue at constant exchange rates) were up
9.7% over the prior-year date. Bookings for the past six weeks integrate the impact on European markets of the end of the early booking period, as expected, as well as the temporary closing of Resorts in Egypt and Tunisia. Bookings for the 2011 summer season show double-digit growth compared with summer 2010, rising by approximately 25% compared wit the same date last year.
Commenting on Club Mediterranee’s performance in first-quarter fiscal 2011, Chairman and Chief Executive Officer Henri Giscard d’Estaing said: “Our first-quarter fiscal 2011 performance reflects the return to growth that we have seen since summer 2010, with a 14.6% increase in revenue and a net gain in customers. For the full winter season, we expect to see another significant rise in Resort operating income, even though events in Tunisia and Egypt could result in an impact of around 5 million euros to 8 million euros.”
Vicky is the co-founder of TravelDailyNews Media Network where she is the Editor-in Chief. She is also responsible for the daily operation and the financial policy. She holds a Bachelor's degree in Tourism Business Administration from the Technical University of Athens and a Master in Business Administration (MBA) from the University of Wales. She has many years of both academic and industrial experience within the travel industry. She has written/edited numerous articles in various tourism magazines.
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