Club Med continues shift up market

Club Med is to expand its five-star offering after successfully attracting more holidaymakers to its upmarket resorts last winter.

The operator saw a net gain of 36,000 holidaymakers to four and five-star villages during the winter season and 84,000 in the past two years. More than half of Club Med customers (54%) stayed in higher grade properties last winter, figures released today showed.

Club Med gained 20,000 new customers in total over the winter.

The all-inclusive company’s first five-star village in Mauritius attracted 23% more customers than its winter sun village average, achieving an occupancy rate of 64%.

The concept is to be expanded in winter 2008-09 to the sailing cruise ship Club Med 2 and the Le Riad village in Marrakech.

The French company, which is divesting of the Jet Tours operator to Thomas Cook and a stake in Club Med Gyms for a total of 330 million euros, is to shift other villages up market.

Club Med resorts in Bail and Bintan Island, Indonesia; Djerba, Tunisia; Tignes Val Claret in France and Da Balaia in Portugal are all being renovated. Sahoro in Japan, Punta Cana in the Dominican Republic and Lindeman in Australia will move up from three to four star following revamps.

The company plans four new luxury resorts in Senegal, Brazil, Taba in Egypt and Oman. A village in Sicily is also to be renovated.

Bookings for this summer are up by a total of 8.8% over the same period last year, with European bookings rising by nine per cent, helped by early booking offers. Allowing children under the age of four to stay for free has been “a major success”, the company said.

Online sales now account for 12% of total business, up four points from winter 2006-07.

The multilingual Club Med website recorded nearly 10 million visits in winter 2007-08 and the company confirmed it is on target to achieve 220 million euros in online sales this year.

“Early bookings for the current summer season as well as for next winter reflect a growing tendency among customers to book earlier each season,” the company said. “This phase is typically followed by a lull, which should then lead to an increase in last-minute sales.”

The winter 2008-09 programme was put on sale earlier to help meet the trend.  Bookings for the coming winter stand at 18.3% of total 2007-08 levels, up from 6.7% at this time last year.

Revealing a net winter loss of nine million euros against a profit of two million euros a year earlier, chairman and CEO Henri Giscard d’Estaing said the company had decided to “refocus on our core business” through the two proposed asset sales.

“In this way, looking forward to 2009 and beyond, Club Med will be configured for a new phase of growth,” he said.

Backed by a solid, reinforced financial structure, the successful completion of the move upmarket and the growing impact or efforts to drive stronger innovation, “we’ll be able to step up our organic growth by pursuing our targeted, profitable investments in new destinations”.

by Phil Davies 

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