Fresh from its Hong Kong initial public offering last month, Fosun Tourism Group is making good on its intention to use the proceeds to develop two new integrated resorts in China, announcing properties under the Thomas Cook Group brands Casa Cook and Sunwing.
The two projects are in Lijiang, Yunnan province, famous for its UNESCO World Heritage old town, and Taicang, Jiangsu province, 30 minutes from Shanghai.
Fosun Tourism chairman and CEO Jim Qian told Skift he is seeing different segments emerging in China’s domestic travel market. While this is already the norm in mature western markets, it’s just starting in China, and there’s a need to offer local travelers a choice of hotel brands and a variety of experiences, said Qian.
In so doing, Fosun is turning to what’s in the family, its own Club Med and its Thomas Cook China joint venture. The Lijiang Albion International Resort will also have a Club Med, which has “a different positioning” from the boutique, design-led Casa Cook, he said.
The whole development in Lijiang is spread over at 350,000 square meters (382,765 square yards). It is located near the Baisha old town, which lies closest to the majestic Yulong Snow Mountain, and is the only land permitted for massive development.
How it will be sensitive to the tranquil and preserved ancient surroundings remains to be seen. For now, its website says it aims to attract mid- to high-profile guests by offering the total package, including a Club Med snow-themed resort, a guesthouses town, riverside shows, heritage towns, outdoor activities, health and wellness.
“We will deliver a lot,” said Qian. “I believe in the future when a family goes on a holiday, they don’t just want to stay in the room.
“Nowadays in China, we have more resort hotels in destinations such as Sanya, but most are actually business hotel brands moving from the city to the beach. I don’t think that kind of hotel is suitable for a family holiday. We will introduce the real beach or holiday resort to a destination.”
Not much is known of Fosun’s other resort project in Taicang except that it is smaller at 145,000 square meters (158,570 square yards).
Both are expected to be completed in stages from late 2020.
Something for Thomas Cook Group to smile about
For Thomas Cook Group, which had a bruising 2018, having Fosun strengthen the existing Thomas Cook China partnership with hotel development is a much-needed uplift.
CEO Peter Fankhauser told Skift the group’s goal of 10-15 Thomas Cook-branded hotels in China in the next three to five years is achievable with the “huge support from Fosun now.”
“It’s absolutely great,” he said. “Fosun is very engaged and very committed. That has become clearer than ever to me, having spent lots of time with them in the last three days in Shanghai.”
Development does not exclude other players, however. Last year, Thomas Cook China announced two Sunwing resorts to be built by Hong Kong-based DreamEast Group in Jiashan, near Shanghai, and Hengyang, southern China.
Fankhauser also imagines bringing its Cooks Club millennial brand into China with Fosun. “If I get it right, there are large numbers of millennials especially near cities like Shanghai and Beijing,” he said.
Should Club Med worry about Thomas Cook’s expansion in China? Said Fankhauser, “We spent a lot of time with Club Med, too, in Shanghai. It’s a fantastic product but, as the name says, it is a club product, different from ours.
“There could be overlaps in certain segments but the ocean is big enough, we want to be two fishes not competing with each other but with other fishes.”
Having its own hotels is important because these properties help Thomas Cook China tap the huge domestic market, which is still a small pie for both Fosun and Thomas Cook China.
Domestic guests are potential overseas travelers. Last year, Thomas Cook China carried 160,000 Chinese travelers, largely to overseas destinations such as Thailand and Japan.
The hotels could also help Thomas Cook Group expand European inbound travel into China. “We imagine a Sanya-Lijiang combination for Europeans to be ideal, given how wonderful Lijiang is, combined with the beach holiday in Sanya,” said Fankhauser.
Last July, Thomas Cook UK launched packages to Sanya on the back of the first direct flights between Sanya and London operated by China Southern.
‘Everyday is Foliday’
Fosun Tourism, whose slogan is Everyday is Foliday (short for Fosun holiday), having tested destination development and management with its fully owned Atlantis Sanya, is keen to bring the experience to bear on the projects.
“We have the experience in the construction of resort destinations, and we know how to make foreign brands suitable for the Chinese market,” said Qian.
Fosun Tourism also believes the timing is good. It pointed out the per capita tourism expenditure in China in 2017 was about $575, which was below the global average of $741. “This implies the great potential for the growth of China’s tourism market,” it said.
What’s more, it claimed to be in a stronger position now, announcing ahead of its annual results to be released in March that it expects a net profit of at least 350 million yuan ($52 million) in 2018, compared with a net loss of 295 million yuan ($44 million) in 2017.