Club Med sees rate improvement as demand returns

Henri Giscard D'Estaing President Club Med at IHIF
Henri Giscard D’Estaing, president of Club Med, speaking at IHIF 2021. (Questex)

Club Med has seen double-digit growth in its average daily rate (ADR) following the global Covid-19 pandemic.

Speaking at the International Hospitality Investment Forum (IHIF) in Berlin, President Henri Giscard D’Estaing said the increase had been achieved even as the upmarket resort operator struggles to attract the same number of customers as it did in 2019.

However, he added Club Med’s focus on safety, customer service and increasingly the environment had led to the growth in ADR paid by grateful customers.

Giscard D’Estaing said: “The desire for holidays [among consumers] is massive and with the concern for safety, price is not the question if you can offer an experience and the feeling you are in a safe place.”

He added despite the positive news, the resort operator has felt the impact of the pandemic and was only able to open 27 of its 51 resorts in July 2020, although this number rose to 41 in July 2021.

“We had about double the capacity [in 2021] that we had a year ago and our capacity [in 2021] was 27% below two years ago,” Giscard D’Estaing said.

He added from March 2020 to June 2021 Club Med was able to cut 32% of its fixed costs while a mixture of government-backed loans, the juggling of staff employment and its global nature – which allowed operations to continue in less badly impacted areas - also helped the company survive.

Giscard D’Estaing was also optimistic about the future, particularly since Club Med has just opened another resort in the Alps following a €120 million investment as well as one in the Seychelles.

Further resorts are expected to open soon in Lijiang, China. and Canada while a total of 16 are expected to be up and running by the end of 2023.

He said Club Med has been further boosted thanks to its partnership with Chinese multinational Fosun, adding: “We wanted to have a Chinese partner as we suspect China will have the largest tourist market in the world.”

Giscard D’Estaing also argued that this trend might happen sooner than was originally predicted before the pandemic, adding: “[In the long term] I believe we will keep going in the same direction [as currently], but it’ll go faster.”