- “Fosun Tourism Group is one of Fosun’s core businesses [International]and Club Med is one of the core businesses of Fosun Tourism Group,” Xu Bingbin, co-president of Fosun Tourism Group, told CNBC in an exclusive interview.
- While there has been “significant demand for outbound travel” since China’s reopening, there is still some work to be done, Xu acknowledged.
- There has been a strong rebound in Club Med’s business from the Americas and EMEA from the second half of 2021, but operating income in Asia-Pacific is “still far from pre-Pandemic levels,” Fosun Tourism Group said in releasing its earnings in 2022.
In this photo taken on Oct. 12, 2016, a general view of the Club Med resort in Sanya is seen. Almost two years after being bought by Chinese investment fund Fosun, holiday resort French group Club Med is trying to import its recipes into a promising Chinese market, where the growing upper middle-class is now discovering the concept – new still in Chinese society – of holiday resorts.
Nicolas Asfouri | Afp | Getty Images
Club Med is “very optimistic” about China’s reopening, an executive from Fosun Tourism Group told CNBC on Monday, adding that the luxury resort chain is “definitely not for sale.”
Xu Bingbin, its co-president told “Squawk Box Asia” in an exclusive interview on Monday that “Fosun Tourism Group is one of Fosun’s core businesses [International]and Club Med is one of the core businesses of Fosun Tourism Group.” Fosun Tourism Group is the leisure arm of the Chinese conglomerate, Fosun International.
Bloomberg reported in November that Fosun International was exploring “strategic options” for Club Med as a way to reduce debt.
“We are really happy to see if … partners in different parts of the world can provide synergy for us, but Club Med is definitely not for sale,” said Xu, who is also the CEO of Club Med China.
While there has been “significant demand for outbound travel” since China’s reopening, there is still some work to be done, Xu acknowledged.
“At the moment, the wind capacity from our main sourcing market [China] in major destinations is not there yet.”
Xu added that he foresees the peak of outbound travel happening this summer, with the per capita spending of its “target clients” increasing.
There has been a strong rebound in Club Med’s business from the Americas and EMEA from the second half of 2021, but operating income in Asia-Pacific is “still far from pre-Pandemic levels,” Fosun Tourism Group said in their 2022 earnings release.
That’s because of remaining travel restrictions in Asia Pacific countries and a resurgence of Covid-19 in China, the company said.
The tourism group posted its 2022 earnings on Thursday, reporting $2 billion in revenue — a year-over-year growth of 48.8%.
Xu added that it recovered 99% of its pre-pandemic business volume in 2019.
Hong Kong-listed Fosun Tourism Group shares rose 0.93% while Fosun International shares were 3% lower on Monday, marking the lowest level seen since December.
Club Med said the lifting of pandemic-related restrictions “accelerated its recovery” in the EMEA and Americas regions.
Business volume in the EMEA region increased 116% year-over-year and grew 89% in the Americas compared to a year ago, the company said.
While business volume for Club Med in Asia Pacific grew 110% year-on-year — indicating a “rapid recovery” — growth in mainland China recorded only a 2.3% increase, according to the report. income
Xu said he remained “optimistic” that domestic business will see a stronger rebound, given China’s easing of pandemic restrictions.
“Actually [during] Chinese New Year, we achieved 30% [more] than 2019 for our domestic business … our business is really picking up and we’re gaining market share,” he told CNBC.
Fosun Tourism Group also owns travel agency Thomas Cook and other tourism destinations in China, such as Atlantis Sanya on Hainan Island and Lijiang FOLIDAY Town in Yunnan Province.