First Free Story (1 of 3)Join Skift Pro
All-inclusive, sun-drenched holidays and snow-capped ski resorts have long been synonymous with the Club Med brand name. What started in the 1950s as a set of modest European vacation villages has grown exponentially to become one of the most recognizable resort groups. Club Méditerrannée’s 80 resorts in 30 far-flung destinations in its impressive portfolio include the Caribbean, Turkey, Mauritius, Maldives, and now China.
With the help of its Chinese backers Fosun Group—the largest privately owned conglomerate in mainland China—Club Med is vying to attract the lucrative Chinese travel market. Fosun Group announced in May its intent to take over a majority stake in the iconic French resort company in conjunction with AXA Private Equity, a deal which is currently delayed.
The move to the mainland comes as no surprise given recent tourism figures. In 2012, 83 million Chinese tourists spent $102 billion on international travel, and the numbers are expected to grow to 100 million in 2015, according to the UN World Tourism Organization. Club Med is responding to the high demand by aggressively expanding its presence in China with the opening of five new resorts before 2015.
“The model of Club Med is family-oriented, and this is very suitable for Chinese customers. After we invested in Club Med and opened two resorts in China, the number of Chinese visitors to Club Med resorts worldwide has increased rapidly,” says Guo Guangchang, chairman of Fosun Group.
Existing resorts in China include the Yabuli property—a charming ski village set in the wintry landscape of Heilongjiang province—and Club Med Guilin. Launched in August, Club Med Guilin is another expansive property surrounded by stunning limestone karsts and located inside a UNESCO World Heritage Site.
In a response to nationalistic concerns over the loss of the French hospitality icon, Fosun is vocal about their intent to keep the brand’s longstanding legacy and spirit alive. “We know China best, so we focus on China’s growth momentum with global resources,” says Guo. “However, we also respect the history and corporate culture of the company, therefore we intend to retain the original management team and business model when investing in overseas markets.” Henry Giscard d’Estaing will remain as president of Club Med.
What was initially meant to be a swift deal has been stalled due to minority shareholders disputing the proposed offer price, and a hearing has been set in Paris for February 2014. In the joint, friendly takeover by Fosun Group and Paris-based AXA Private Equity, the proposed buyout would amount to 92 percent of the company, with the remaining 8 percent going to Club Med management. Currently, Fosun Group holds 9.96 percent of stakes in Club Med.
This story originally appeared on Jing Daily, a Skift content partner.
Additional links from Jing Daily: