Club Med seeks Chinese travelers to make up for weak European market

Skift Take

With only two resorts in China, Club Med is one of many foreign resorts and destinations competing for lucrative Chinese tourists’ business.

— Samantha Shankman

Club Mediterranee SA, the French all-inclusive tour operator, plans to more than double the number of customers it serves in China in three years as wealth in the region increases faster than elsewhere.

“We identified 60 million potential customers for us worldwide some years ago,” Chief Executive Officer Henri Giscard D’Estaing said at an interview in Frankfurt. “That number has probably grown since as global wealth increased, and the part coming from Asia is the one growing fastest.”

Club Med expects to have 200,000 Chinese customers by 2015, compared with 86,000 last year, making it the company’s second- largest market. The company will add four resorts in the country and almost double its presence in travel agencies. Chinese guests spend as much as 20 percent more compared with Europeans as they book upscale resorts and the country has a potential 26 million Club Med clients, D’Estaing said.

European tour operators are expanding into faster-growing emerging markets as the region’s credit crisis drains holiday spending. Club Med plans to raise its share of guests from emerging markets to one-third by 2015 from one-quarter today.

Rising prices for jet fuel are also hurting operator’s margins while the Arab Spring has led clients to avoid some destinations in the Middle East.

Club Med Peak

Club Med shares reached a record 139.03 euros in July 2000 and traded 90 percent below their peak at 14.04 euros at 4 p.m. in Paris, giving the company a market value of 447 million euros ($588 million).

Customers from France, the company’s home market which contributes 45 percent of revenue, are suffering from rising unemployment which rose to 10.3 percent in the third quarter of 2012, the highest in more than 13 years. German unemployment unexpectedly declined in January, adding to signs that a pick-up in Europe’s largest economy is gathering pace.

A “very famous German family of three´´ last year spent in excess of 100,000 euros for a two-week trip to Mauritius, Eric Georges, the company’s manager for Germany and central Europe, said.

‘‘That’s an extreme example of a new clientel of Club Med,” D’Estaing said, adding the average customer spends about 160 euros per day, excluding flights. “There’s a big range here.”

Editors: Tim Farrand and Kim McLaughlin.

To contact the reporter on this story: Richard Weiss in Frankfurt at [email protected] contact the editor responsible for this story: Benedikt Kammel at [email protected]

Tags: china, resorts

Destination Mexico: The Evolution of Luxury Travel

Luxury travelers are looking for more than just posh accommodations and generic pampering. Savvy suppliers and tourism organizations are capitalizing on the desire for authentic experiences, as the sharing economy continues to present new ways to connect travelers with local culture.

Read More

Next Story