January 26, 2017 / 4:07 PM / 3 years ago

Chinese-owned Club Med to open 15 new resorts by 2019

PARIS (Reuters) - Holiday company Club Med, owned by Chinese group Fosun (0656.HK), plans to open 15 new resorts worldwide in the next three years, including one in China and one in Japan in 2017, and to upgrade nine of its existing sites.

The logo of French holiday group Club Med is seen on its Paris headquarters, France, November 3, 2016. REUTERS/Charles

In France alone, still Club Med’s biggest market, the group plans to open one new mountain village resort each year until 2019, Chief Executive Henri Giscard d’Estaing told a news conference.

“The club has resumed its march forward and is now accelerating,” Giscard said, reflecting a new optimism two years after the company was finally bought out.

Fosun Group, China’s largest private conglomerate, took control of Club Med in January 2015 after a fierce battle lasting nearly two years with Italian tycoon Andrea Bonomi, the longest takeover fight in French corporate history.

Club Med was seen as overly dependent on Europe, home to 70 percent of its revenue and sluggish economic growth. Fosun offered it a chance to accelerate a strategy focused on moving further upmarket and expanding abroad, notably in the booming Chinese market.

Club Med now operates 68 holiday villages worldwide, with some 77 percent of its resorts labeled premium or luxury compared with 55 percent in 2010, when Fosun bought an initial 7 percent stake in the company.

China is its second largest market after France with 200,000 customers, up from 59,000 in 2010. This compares with 406,000 customers for France, a number broadly unchanged from 2015.

Club Med has five resorts in China, in Yabuli, Guilin, Zhuhai Dong’ao Island, Sanya, and Beidahu, and will open a Joyview branded resort in Anji this year, Giscard said.

Designed to offer Chinese urban consumers the opportunity to enjoy short holiday breaks, Joyview resorts are located close to China’s major cities. Anji is relatively close to Shanghai.

Club Med, which is no longer listed on the stock exchange, reported a 1 percent rise in clients worldwide to 1.26 million in 2016.

It also generated a 15 percent rise in Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) despite a 1 percent decline in global revenue to 1.469 billion euros.

The revenue decline reflected a 3 percent drop in revenue from Europe, where political turmoil in Turkey and North Africa hurt business. Revenue however rose 6 percent in Asia and 4 percent in America.

Reporting by Dominique Vidalon; Editing by Keith Weir

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