In this photo taken on October 12, 2016, the final view is of Club Med Sanya. Nearly two years after being bought out by Chinese investment fund Fosun, French leisure group Club Med is attempting to import its recipes into the promising Chinese market, where a growing upper middle class is now discovering the concept – still very latest to Chinese society – of resorts.
Nicolas Asfouri | AFP | Getty Images
Club Med is “very optimistic” about reopening China, the director of Fosun Tourism Group told CNBC on Monday, adding that the luxurious resort chain is “definitely not on the market.”
Xu Bingbin, its co-chairman, told Squawk Box Asia in an exclusive interview on Monday that “Fosun Tourism Group is one in all the core activities of Fosun [International]and Club Med is one in all the major activities of Fosun Tourism Group.” Fosun Tourism Group is the leisure arm of the Chinese conglomerate Fosun International.
reported Bloomberg in November, Fosun International explores “strategic options” for Club Med as a approach to reduce debt.
“We are glad that… partners in numerous parts of the world can provide us with synergies, but definitely Club Med is just not on the market,” said Xu, who can be the CEO of Club Med China.
While there was “significant demand for overseas travel since China reopened,” there remains to be some catching as much as do, Xu admitted.
“Air throughput from our major sourcing market up to now [China] to major destinations doesn’t yet exist.
Xu added that he predicts that the height of overseas travel will occur this summer, with the per capita spending of “targeted customers” increasing.
Uneven recovery across markets
There has been a robust rebound within the Club Med business from the Americas and EMEA for the reason that second half of 2021, but operating profit within the Asia-Pacific region remains to be “well below pre-pandemic levels,” Fosun Tourism Group said in its report. Publication of results for 2022.
This is on account of continued travel restrictions in Asia-Pacific countries and the resurgence of Covid-19 in China, the corporate said.
The travel group released its 2022 earnings last Thursday, posting $2 billion in revenue – up 48.8% year-over-year.
Xu added that in 2019, he regained 99% of his pre-pandemic business volume.
Hong Kong listed shares Fosun tourist group rose 0.93% while stocks Fosun International they were 3% lower on Monday, the bottom level since December.
Club Med said the lifting of restrictions related to the pandemic has “accelerated recovery” within the EMEA and Americas regions.
Business volume in EMEA grew 116% year-on-year and grew 89% within the Americas in comparison with last yr, the corporate said.
While Club Med’s Asia-Pacific business volume grew 110% year-on-year – indicating a “rapid recovery” – mainland China recorded only 2.3% growth, in keeping with the Earnings Report.
Xu said he stays “optimistic” that domestic business will see a stronger rebound given China’s easing of pandemic restrictions.
“Really [during] Chinese New Year, we have reached 30% [more] than 2019 for our domestic business… our business is de facto growing and we’re gaining market share,” he told CNBC.
Fosun Tourism Group also owns Thomas Cook Travel Agency and other tourist destinations in China, reminiscent of Atlantis Sanya in Hainan Island and Lijiang FOLIDAY Town in Yunnan Province.
