Henri Giscard d’Estaing, President of French travel and tourism operator Club Med, has been vocal about the importance of tourism in a country’s economic, social and cultural landscape. He shares how the company has navigated the past 18 months by evolving its product and focusing on a transformative experience, global development and digitalization.
Hospitality Insights: The last 18 months have been very tough for businesses relying on international travel. How has Club Med managed the crisis?
Henri Giscard d’Estaing : In its 70-year history, Club Med has been rocked by many geopolitical crises and natural disasters. But the Covid-19 health crisis has been unprecedented in scale and duration. For the first time we had to close all our Resorts because of lockdowns and border closure. This has reduced our operated capacity by 57% in 2020, having an equivalent consequence on our turnover.
But thanks to upscale strategy launched in the 2000s Club Med has become a global leader of premium All-Inclusive holiday resorts for families and active couples. It was in a strong economic position at the start of the crisis, and it has a strong and supportive shareholder with Fosun Tourism.
During the pandemic our main priorities have always been to protect the health and safety of customers and teams, to safeguard the Club Med brand image and our capacity to rebound strongly after the crisis by increasing our efficiency with accelerated digitalization.
Hospitality Insights: What has kept you positive throughout the crisis?
Giscard d’Estaing: The desire for vacations and freedom is even stronger today than it was 18 months ago. The crisis demonstrated that no holidays is not an option for families. And from that point of view, Club Med is well suited to bounce back very strongly and in the long run.
While the crisis has had a major impact on the business, it has also served to demonstrate Club Med’s capacity to operate in a challenging sanitary setting, further positioning Club Med as a best in class for family holidays.
Our customers and prospects trust the brand, especially when they need to be reassured, and have been visiting our resorts everywhere as soon as we could open, paying the right price. That is extremely encouraging.
Finally, we have secured our capacity growth for 2021 with 4 magnificent resorts: our next jewel in the French Alps La Rosière, our first Club Med Exclusive Collection Resort in the Seychelles, the first Club Med ski Resort in Quebec Canada and Club Med Lijiang in China.
Hospitality Insights: Do you believe governments are recognizing the importance of the tourism sector enough?
Giscard d’Estaing: I think we should do more. Tourism is perceived as something entertaining, enjoyable - which is fortunately the case - but it is also indeed a sector that is a very important part of the economy, of social life. At least this crisis has been useful to recall the importance of tourism, which represents almost 10% of the wealth produced in the world and hundreds of jobs, together with being a mean of exchanges between people and consequently a tool for peace.
The survival of the tourism ecosystem is at risk without continued government support. So, we need to learn from the crisis which has revealed gaps in government and industry preparedness and capacity to respond in such a difficult context. Rethinking tourism should be our priority: the sector must become more resilient in the future.
Hospitality Insights: What is Club Med’s main area of focus to drive recovery in 2021 and beyond?
Giscard d’Estaing: Our recovery plan is based on the same three pillars that have proved successful to create profitable growth.
First: « Upscale with Club Med spirit ». In 2022, 97% of Club Med’s capacity will be upscale or very upscale. I believe that the market will pick up starting with high-end tourism and families who are dreaming of being able to go on vacation again.
Next, the acceleration of globalization will increase our market share. From 2021 to 2023, 16 new resorts, including 8 in China are already planned to open around the world. Being global is a clear asset. It allows us to balance markets & destinations versus geopolitical, climatic or economic risks and to secure growth and profitability.
Lastly, digitalization. Digital technology plays a key role in improving and optimizing the customer experience. In Club Med we call it “Happy Digital”. This involves positioning digital technology as a facilitator, an amplifier of customer experience before, during or after stay. At no time should it become a threat of dehumanizing the relationship.
Hospitality Insights: Club Med business focuses on experiential travel. How has the experience changed following the pandemic in terms of the operations as well as guests’ expectations?
Giscard d’Estaing: The vital desire of vacation is accompanied by new fundamental customer expectations: flexibility, safety and transformative holidays.
I am convinced that the winning offers will be those that can combine quality, safety, and exclusive experiences.
In all Club Med resorts, we have taken strong measures to face the pandemic with “Safe together” health protocol certified by Cristal International Standards, a global leader in health and safety process management. Firstly, in China (this served as a pilot), then in all other destinations. The resort experience was redesigned with extended restaurant hours, with focus on single plate dishes. Various digital services were developed to facilitate the customer experience and minimize lines.
We have been looking for a long time to rethink our entertainment from traditional Club Med shows to more diversified ones.
Thus, this sanitary context forced us to evolve our product. As a result, it corresponds even better to the customers' expectations. Our mission is to provide our customers with the freedom and peace of mind they’re looking for.
Another evolving trend is workation. As remote working is becoming the norm, so we are developing other form of stay to combine work and family life.
In addition, travellers will increasingly adopt eco-responsible behaviors that will impact their way of traveling. Based on its 70 years of protecting its exceptional locations, Club Med has very specific environmental rules. We have adopted the most rigorous criteria, the BREEAM standard for construction, the Green Globe certification for operations, and we also work to benefit the local population, since tourism is not only about taking happy vacations, but also about working and improving the living conditions of those around us.
Henri Giscard d’Estaing will be joining a panel discussion on ‘Fight or Flight - The Current State of Global Travel’ at the International Hospitality Investment Forum (IHIF) on Wednesday 1st September 2021.