Club Med bets big on ski & mountain resort business, gains impressive growth from India & other markets, ET TravelWorld

Club Med‘s 2023 outcomes highlight India’s escalating prominence in global tourism, affirming its status as a premier provider of top-tier all-inclusive vacation experiences. Club Med, renowned for all-inclusive vacations, marks a resilient and fruitful year characterised by substantial growth and financial achievements. The company’s 2023 performance not only solidifies its position as a leader in Snow and Sun Holidays worldwide but also underscores India’s vital role in its global expansion plans for 2024.

Club Med has achieved a record first-half 2024 bookings performance at +14 per cent as of March 2024 compared to the same period in 2023, which already showed record levels. With evolution of the ‘all-inclusive’ concept and the growing affinity, Club Med’s evolution to remain relevant over the years and its USPs has led to its success across leisure, MICE, and weddings segment in its’s overall business.

Significantly, 2023 marked a turning point for Club Med’s presence in India, with an impressive 37 per cent increase in overall business volume compared to 2022, highlighting the country’s pivotal role in the brand’s global strategy. Particularly noteworthy was the remarkable 430 per cent surge in Club Med’s ski and mountain business compared to 2022, with India’s market share rising from 6 per cent to 19 per cent between 2019 and 2023. This surge is attributed partly to the “revenge travel” trend and the success of Club Med’s ski and mountain ventures (+75 per cent compared to pre-pandemic levels).Club Med, founded in 1950 by Gérard Blitz, invented the all-inclusive holiday club concept, adding in activities, especially for children with the creation of the Mini Club in 1967. Today, Club Med is the world’s leading provider of upscale, all-inclusive holiday packages with a French touch for families and working couples. Club Med operates nearly 70 resorts, of which 85 per cent are rated Premium & Exclusive Collection.

In a recent conversation with ETTravelWorld, Rachael Harding, CEO of Club Med’s ESAP Markets, shared valuable insights into the company’s business strategies, expansion plans, and the significance of the Indian market.

Reflecting on the results of 2023, Harding, said, “Club Med’s exceptional results are a testament to our market leadership in premium, all-inclusive holidays, especially in our mountain Resorts. Embracing our refreshed brand identity and campaign, That’s l’Esprit Libre’, we will continue to create experiences that allow our guests to disconnect from the worries and mental burden of everyday life to fully embrace the present. This will be achieved through doubling down on the essence of holidays with Club Med where well-designed spaces, curated sports and activities, signature festive ambience and our international team of G.Os are synonymous with our premium all-inclusive program. With a robust expansion plan, Club Med is well-positioned to cater to the travellers of today & tomorrow.”

Flashback: Business Model Resilience and Recovery Post-COVID
Talking aboutrecovery post pandemic and business measures taken by the comapny, Rachael emphasised Club Med’s resilient business model during the Covid-19 era, noting that despite closures in 2020, the company has bounced back strongly. She highlighted the equal contribution of client sources from Asia and North America, which enabled a quick recovery post-pandemic.

Rachael stated, “Our business model proved to be quite strong, relying on multiple source markets globally. We doubled our business volume from 2021, and we’re now more profitable than in 2019.”

Regionally, Club Med achieved exceptional growth in the East and South Asia, and Pacific (ESAP) region. The ESAP region witnessed a 102 per cent year-over-year business volume increase and a 6 per cent surge over 2019.

With a significant rise in guest numbers, the company witnessed a notable 43 per cent increase compared to 2022, reaching pre-pandemic levels. The successful launch of Club Med Kiroro Grand, the fourth Mountain Resort in Japan, in December 2023, further fueled this momentum.

Significance of India in Club Med’s Growth
Speaking about Club Med’s growth in Asia, particularly in India, Rachael mentioned a significant increase in the company’s mountain business in the Asia Pacific region, driven by Indian travellers. She noted that India’s aviation industry growth, especially with premium clients and increased domestic travel, has further contributed to Club Med’s success in the region.

Rachael highlighted, “Before Covid-19 pandemic, we had no ski business from India, but now it constitutes 32 per cent of our business. India is not just back but at 180 per cent of pre-pandemic levels, showcasing a different mix of business preferences.”

Club Med has achieved several key highlights on a global scale in 2023. The Business Volume has reached EUR 1,981 million, which is a 17 per cent increase compared to 2022 and a 16 per cent rise compared to 2019. The Resort Operating Income has also hit a record high of EUR 174 million, up by 64 per cent from 2022 and 70 pe cent from 2019. Moreover, Club Med has also achieved a 6 per cent capacity boost compared to 2022. Additionally, 97 per cent of the capacity offered in 2023 was upscale or very upscale, which is an improvement from 2019.

Post-Pandemic Travel Trends and Marketing Strategies
Discussing post-pandemic travel trends, Rachael noted a shift towards experiences over material possessions. She emphasised Club Med’s focus on catering to Indian preferences, including vegetarian options, and providing immersive experiences for families and couples through activities and childcare services.

She mentioned, “We’ve seen Indians prioritise experiences, and our resort caters to 70 per cent families and 25 per cent couples. We’re investing in influencer partnerships, PR, and direct marketing to amplify brand awareness in India.”

Notably, Club Med’s operating margin has increased by 50 per cent, reaching 9.5 per cent compared to 6.2 per cent in 2019. This increase is attributed to a successful upmarket strategy and optimized business model. Club Med has also transitioned to a 100 per cent Premium & Exclusive Collection. The full upscale transformation of the Club Med Resort portfolio is expected to be completed by mid-2024.

Expansion Plans and Target Markets
Looking ahead, Rachael discussed Club Med’s expansion plans into new destinations, including India, Malaysia, and Japan. She outlined specific criteria for new properties, such as proximity to international airports, attractive destinations, and potential for diverse source markets.

“We’re opening 17 new resorts and renovating 10 more by 2035. India ticks all the boxes for us, and we’re actively seeking the right property to expand our presence,” she elabored.

In terms of guests, Club Med welcomed over 1.5 million guests in 2023, which is a 16 per cent year-over-year increase. This increase was primarily driven by rebounding travel from Asia post-pandemic restrictions. The average room occupancy rate has also increased by 3.4 points from 2022, reaching 70 per cent.