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Club Med returns to profit
Club Med has recorded its first profit in four years with net income of 3 million euros for the six months to April 30.
The French holiday village company achieved the financial turnaround despite “the major impact of natural disasters” at the end of last year – referring to the impact of the tsunami in Asia and hurricanes in the Caribbean.
Five of the group’s most profitable villages had to be shut temporarily reducing revenues by 35 million euros. But this was offset by insurance settlements of 24.7 million euros. The overall impact was worth 20 million euros.
The company is continuing to adopt synergies with major shareholder Accor in areas such as purchasing, cross-loyality programmes and a joint B2B offering.
Chairman and chief executive Henri Giscard d’Estaing said: “Our winter results demonstrate that Club Mediterranee is on the right track. Our business model is working and our upmarket, friendly, multicultural positioning is aligned with the expectations of our customers.
“Critical milestones, such as the develpment of initial synergies with Accor, have been reached in recent months and have paved the way to leverage additional growth drivers as early as winter 2006.
“After the natural disasters at the end of 2004 and their impact of about 20 million euros on our planned objective as of the end of winter 2005, we are maintaining our target of around 100 million euros in operating income by the end of fiscal 2006, although this environment obviously makes it much harder to meet.”
Club Med also revealed that total revenues from summer 2005 bookings at June 4 were up 4.5%, with villages in Europe and Africa up, while those in Asia and the Americas remain down.
The results were presented at a revamped village at Otranto in Italy together with plans for winter 2005-06 including the further upgrading of properties and an extension of inclusive bar and snack offers for all snow villages in Europe.
Report by Phil Davies
Phil Davies
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