After returning to its pre-pandemic level as early as in 2022, Club Med, pioneers of global all-inclusive holidays, reached nearly 2 billion Euros in business volume for the first time in its history.
The increase of 50% of its operating margin, close to 10%, and its record net profit, demonstrates the success of Club Med’s new business model, whose transformation started in 2004.
“2024 marks the successful finalisation of the move upmarket of our resort portfolio. In its 74-year history, Club Med has never had such a desirable portfolio of Resorts, either new, recent, or renovated. With a new strong increase in bookings for first half 2024, Club Med is well on track to become a French world champion and the most desirable lifestyle tourism brand, offering a life changing experience to its employees and contributing to sustainable tourism,” says Henri Giscard d’Estaing, President of Club Med.
Successful transformation of Club Med’s business model
Club Med’s record business performance in 2023 is the result of the transformation of its business model towards an upscale, glocal and happy digital offering, initiated in 2004.
In 2023, 97% of the Resort portfolio consisted of Premium and Exclusive Collection Resorts and will achieve 100% by April 2024.
The Resorts operating income margin increased by +50% compared to 2019, owing to several optimisation factors:
- On the commercial side, the distribution costs ratio compared to the Business Volume has been improved by +1,3 points from 2019 compared to 2023 which contributed to the increase in operating margin.
- On the operations side, the upscale positioning positively contributed to Club Med performance as the costs increased less than the progression of the mix-price.
As a result, the Resort profit margin (GOP), before real estate costs, gain +2 points from 2019 to 2023.
In 2023, Club Med continued to strengthen its upscale positioning with the opening of 4 new premium and Exclusive Collection Resorts:
- Exclusive Collection Space La Rosiere, in the French Alps, 43 Suites connected to the Premium Resort Club Med La Rosiere;
- Club Med Kiroro Grand in Hokkaido, Japan;
- and 2 Club Med Urban Oasis, Taicang and Nanjing Xianlin, a unique product created specifically for Chinese urban family tourism.
In 2024, Club Med will reveal 4 new Resorts for premium holiday experiences:
- Club Med Vittel Ermitage and Club Med Serre Chevalier in France, completely transformed to offer an upscale experience.
- And 2 Resorts in China: Club Med Joyview Heilongtan and Club Med Forlong.
The success of a strategy based on 5 pillars
Club Med’s strong performance demonstrates the relevance and success of its strategy, based on 5 pillars:
- Premium with Club Med spirit: The rebound in travel showed that the high-end family holidays sector is the first to recover and is more resilient when facing the effects of markets cycles.
- Become the Hospitality employer of choice: As the tourism industry was facing difficulties in recruiting and attracting talent, Club Med’s ambition is to offer its teams a “life-changing experience” through personalized management, training and fast-track career paths.
- Glocal: Combining a global approach with a local focus in terms of markets, products, and destinations, to achieve sustainable growth and diversify regional operational risks.
- “Happy Digital”: Continuing the digital transformation to improve the customer experience and teams’ efficiency in resorts and offices, by investing heavily in digital and technology now focusing on data and AI.
- “Happy to Care”: Aiming to take care of the environment and communities, with the implementation of numerous actions of responsible tourism: BREEAM eco-certification for the construction of Resorts and Green Globe certification for the daily management of Club Med Resorts.
Today, Club Med operates 68 Premium & Exclusive Collection Resorts and continues its development with a focus on 2 strategic products lines playing a crucial role in its business model:
- Mountain
Since the opening of its first mountain Resort in Leysin, Switzerland, in 1957, Club Med, the pioneer of all-inclusive vacations, has also been a leader in mountain-based holidays. Today, Club Med operates 25 Resorts located in the heart of the most beautiful summits in the French, Swiss and Italian Alps, as well as in China, Canada, and Japan.
In 2023, Club Med saw the business volume of its Mountain Resorts increased by +33% compared to the year 2022 and amounted to €523 M. It represented 32% of global group business volume.
Mountain Resort’s average daily bed rate was €285 offering the best price-quality ratio due to its all-inclusive value proposition, with an unrivalled on or off ski experience, a large range of activities for families, and due to the massive investments to enhance its mountain portfolio.
In 2023, Club Med Mountain Resorts welcomed 355,000 customers (+26% on 2022) from all over the world, including Brazil, Europe, and Japan.
- Exclusive Collection
Club Med Exclusive Collection is Club Med’s luxury range, the most premium Resorts of Club Med portfolio. In 2023, this portfolio consisted of 20 properties including: 5 Exclusive Collection Resorts, 10 Exclusive Collection Spaces, 4 Villas and Chalets, and 1 Sailing Yacht, the Club Med 2, representing 11% of Club Med global capacity.
In 2023, the business volume of Exclusive Collection amounted to €294 M, up +18% compared to 2022. Its average daily rate amounted to €315, representing +40% more of the average ADR of the group. 139,000 customers were welcomed at Club Med’s Exclusive Collection properties, marking a +17% increase over 2022. The growth is mainly due to the newly opened Exclusive Collection Resort in Val d’Isère, the Exclusive Collection space at Club Med Tignes, and the success of the recently renovated Club Med 2 sailing yacht.
Very encouraging booking trend for the first half of 2024
The trends for the first half of 2024, driven in particular by continued growth in demand for the Mountain vacation in Club Med, and the “revenge travel” phenomenon in Asia, reflect a new phase of growth, compared to the same period of 2023, which has already seen historical figures.
Bookings for departures in H1 24 (as of March 02, 2024), are up +14% compared to H1 23, evolving differently in various geographical areas:
- +7% for Europe;
- +11% for the Americas showing a continued increase in demand for Club Med vacations;
- +51% for Asia thanks to the “revenge travel” phenomenon following the reopening of several destinations and markets in Southeast Asia, the gradual recovery of the tourism sector in China.
