China-owned Club Med reports travel demand surpassing 2019 as Singaporeans, Malaysians book snowy, premium destinations
- Resort company owned by Shanghai-based Fosun Tourism reports ‘strong rebound’ despite inflation and interest-rate pressures
- Travel operators believe the reopening of mainland China, coupled with pent-up demand everywhere, bodes well for the sector
With travel across the globe recovering, Club Med is eager to introduce more of its destinations to the Asian market, especially since China has scrapped all its Covid-19 restrictions, allowing the world’s largest population to become international tourists again after three years.
“In the Singapore and Malaysia markets, we see opportunities to develop new destinations like the French and Italian Alps, where we already doubled our revenue [compared] to pre-pandemic.”
Club Med’s confidence for global tourism reflects a common sentiment among travel operators: that the reopening of mainland China, coupled with pent-up demand everywhere, bodes well for the sector as countries dismantle anti-pandemic measures.
Fosun reported a 2.6 billion yuan (US$383 million) loss for financial year 2020, compared with a profit of 608.7 million yuan in 2019. The chain, known for its all-inclusive packages and daily activities for guests, closed all of its resorts for several months during the early stages of the Covid-19 pandemic, according to the company’s 2020 annual report.
Part of Club Med’s optimism today stems from strong demand in markets other than mainland China.
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Just before Beijing dropped all its pandemic curbs, Japan, Singapore, Malaysia and Australia led Club Med bookings in Asia-Pacific. Before the pandemic, mainland China was one of its three largest markets in Asia.
“We already see strong demand in the Singapore and Malaysia markets,” said Monceau. “Bookings are above pre-Covid days in 2019.”
In Singapore, for example, bookings for the hotel chain’s properties in Japan grew sixfold in the month after Japan opened to Singapore visitors, compared with 2019 average stays, he said.
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“In the coming years, to support our growth, we anticipate a 26 per cent increase in annual capacity by 2024 as compared to 2019,” Monceau said. “In 2024, Club Med will be opening its first Southeast Asian greenfield beach resort in Borneo, Kota Kinabalu.”
To grow its brand in Singapore and Malaysia, he said, Club Med is targeting families and active couples to get them to the group’s new properties including “snow and the most premium destinations”. Another aim is to build “a smooth omnichannel experience” for guests.
While concerns about the pandemic have largely subsided, consumers across the globe are facing another challenge from high inflation and interest rates that are likely to dampen discretionary spending, including leisure travel.
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“Our 2023 bookings have been going strong so far, showing the optimism of the markets,” Monceau said. “Ninety-one per cent of our customers have a strong desire to continue travelling, which shows the resiliency of the travel industry.”
Hotel property consultancy M&G Real Estate expects that hotels specifically catering to tourists are likely to see a faster recovery than those who target business travel.
“I am a big believer, personally, in the rise of tourism,” said José Pellicer, head of investment strategy at M&G. “However, I have question marks about the future of business travel and whether business travel will recover to 2019 levels, because of [online] meetings.”
