Club Med Aims to Shift Upmarket With New Resorts and Ad Campaign

Club Med has had more re-inventions than Justin Timberlake. But the all-inclusive brand run by Chinese conglomerate Fosun International thinks it can finally bring the sexy — and profit — back to its 70 getaways that arc from Bali to China's Hainan Island to the French Alps and Florida.

Marketing will help, it thinks. On April 4, Club Med revealed a refreshed brand identity to customers and travel agents and its ambition to become "a more premium, family-friendly, and eco-conscious experience." More on that below.

But first, let's get some financial context. Back in 2018, Fosun Tourism Group —the unit that houses Club Med — sold shares in the company. That transaction gave the tourism unit an implied market capitalization of $2.4 billion. Today its market capitalization is only $1.59 billion — a third less.

Last November, Bloomberg News reported that Fosun International was contemplating whether to sell Club Med.

But this week, Fosun Tourism co-president Xu Bingbin told CNBC that Club Med is "definitely not for sale." He did say, however, that his company is opening to finding "partners" to help grow its business.

Fosun Tourism released its 2022 financials last Thursday, reporting global Club Med sales of $1.75 billion, returning to 99 percent of what they were in 2019.

On the downside, Club Med has long generated profits as skimpy as a string bikini. Its 2022 operating profit was about $110 million (€98 million), compared to approximately $57 million in 2018.

On the bright side, the company's resorts have, on average, recovered 99 percent of their pre-pandemic business volume — and that's before China's domestic and outbound international travel have fully rebounded.

Yet debt remains something to watch. As of June 2018, the tourism division of Fosun had approximately $700 million in net debt. As of December 2022, its net current liabilities were about $480 million, or 56 percent of its total assets.

As context: earlier this month, the larger Fos