(Yicai Global) June 26 -- Club Med, the world's largest all-inclusive leisure resort chain group, and the first overseas direct investment of Fosun Group, has hit the gas on its development in China.
"In the last two months, we have unveiled three resorts, two of which belong to Club Med Joyview, a new resort brand created to meet the specific needs of the Chinese market," said Qian Jiannong, chairman and president of Fosun Holiday (Foliday), in an exclusive interview with Yicai Global.
Fosun spent five years gaining control of Club Med following its investment in 2010. Qian, a member of Club Med's board, was a key player in that takeover.
Foliday seeks to provide the best leisure holiday solutions for families around the world.
Club Med has more than 70 resorts in 30 countries around the world, none of which were in China before Fosun's investment. Club Med opened its first resort in the country in 2010 in the ski resort of Yabuli in northeastern Heilongjiang province. The newly unveiled Club Med Joyview in Anji, an area of outstanding natural beauty in southeastern Zhejiang province, is its sixth resort in the China.
Unlike other Club Med resorts, Anji Joyview and the Beidaihe Golden Coast Resort unveiled a month ago in a beach town in Hebei province to the east of Beijing are new product series Club Med built itself.
The main attraction is excursions to surrounding areas, which are within three hours' drive of Beijing, Shanghai, Guangzhou and other first-tier cities. Prices are also more flexible, and packages more customized.
"The idea of opening Club Med Joyview was actually put forward in 2011 to satisfy the demand for short-distance trips for two or three days since Chinese consumers have a shorter annual leave. This actually goes against the grain of Club Med's traditional vacation model of islands and skiing," Qian stated, adding that a new Club Med Joyview will also be in place at the foot of the Great Wall by the second half of this year, while Foliday also intends to site such products in the future in Europe and other parts of the world.
The company has opened very few resorts in the past decade, but the number has been increasing since 2015. Now it must hasten its progress, said Henri Giscard d'Estaing, Club Med's chairman and president -- and son of a former president of France -- adding that the vacation operator will open at least 3-5 new complexes per year over the next five years.
Club Med's throttled-up expansion is intextricably bound up with its recent performance growth. Its operating profits climbed 35 annual percentage points in 2016, its best showing in ten years, and it further grew 16.6 percent last year, whereas it suffered slumps in performance and even losses in the few years before 2015.
This turnaround has everything to do with Fosun's involvement. "After investing in Club Med, we participated in devising strategies for the whole company. After we assumed control, the firm's strategic advancement has also sped up," Qian said.
Shareholders and management agree on strategic advancement in the future, that is, Club Med should gravitate toward a more high-end (resort upgrade and transformation, focusing on mid- and high-end customers), more globalized (accelerating the deployment in Asia, especially China), and more digitized (consolidating direct selling and technical investment) direction while focusing on an asset-light business model, Qian also stated.
In the previous resort projects of Club Med, 20 percent of the assets were held by the company itself, 30 percent were leased, and 30 percent were outsourced.
The newly-opened resorts mostly adopt the asset-light outsourcing model, especially the six resorts in China.
"In the future, Club Med will also focus on the asset-light business model, whereas its parent company, Fosun, can act as a proprietor by investing in some projects, similar to the Hokkaido Hoshino Resorts Tomamu opened in Japan last year," Qian noted.
Foliday will siphon more business into the leisure tourism industry chain ecosystem, and will explore more synergies with Club Med, Qian also advised.
Veteran British travel agency Thomas Cook, Miniversity and Atlantis Sanya inaugurated this year on China's southern island province of Hainan are important Foliday business brands.
The firm operates in six core sectors, namely leisure resort hotels, tourism destination development, scenic spot management, leisure vacation content, travel agency platform, and investment sector, and it has also developed some complex projects such as destinations around tourist sites and major cities in China such as Xi'an in northwestern Shaanxi province -- home of the Terra Cotta Warriors -- and Lijiang in rugged, ethnic southwestern Yunnan province.
"Foliday hopes to build a 'Wal-Mart' in the tourism industry, offering one-stop service for family leisure tourism around the world. It intends to start by providing tourism upgrade products, and then fostering technical and model innovation, considering local demands, after investing in the best tourism destination resources and leisure resort brands in the world, and ultimately create an ecosystem for new era of tourism and a new lifestyle," Qian asserted.
"This lifestyle is just what we advocate: Everyday is Foliday. People don't have to think about Monday and Sunday because every day is Foliday. A family can go on vacation in a Foliday setting, but at the same time finish a lot of work. I believe that the pursuit of Foliday instead of Holiday is the development trend of the society in the future," he concluded.
Editor: Ben Armour