Club Med displays resilience in first half of 2013 despite recessionary environment in Europe
Almasalla Travel News – MIAMI, Fla. – Commenting on Club Med s performance in North America, President and Chief Executive Officer, Xavier Mufraggi said:
"The financial results in the first-half of 2013, which show a 5.6% increase in revenue in the Americas, illustrate that despite today’s harsh economic climate, Club Med continues to be a leading force in the all-inclusive vacation industry
. Exceedingly more U.S. and Canadian travelers are looking for different vacation options outside of the Caribbean and Mexico, and with 78 all-inclusive resorts worldwide, Club Med stands poised to meet this demand. The ski market has shown especially great potential, with a 35% increase in business volume over last year.
Through the recent offer from two of our major shareholders, Club Med is pushing to accelerate our internationalization in high-growth markets while simultaneously strengthening our position in those already established. Two properties that showcase Club Med’s expansive portfolio of global resorts include the newly renovated Rio das Pedras, Brazil, (situated alongside one of the world’s most ecologically diverse rainforests) and Guilin, our second resort in China, where we are pioneers in the all-inclusive vacation concept. Additionally, Club Med differentiates itself through innovative product offerings for families, such as the Active Wellness program available at Sandpiper Bay, Fla., and our new pricing strategy, ‘Kids Under 4 Stay Free,’ which has had great success since its May debut, with bookings for families with children ages two to three years increasing more than 30%."
Key Figures for the First Half of 2013 (November 1, 2012 – April 30, 2013)
1. Business performance of the first half of 2013
a) Impact of School Holidays on Operating Performance
Winter 2013 was boosted by the positive impact of the timing of the late October/early November school holidays; this represented 8 more days of holidays in November 2012 with an additional business volume estimated at €5 million.
However, the first half of the fiscal year was adversely affected by the shift in the timing of Paris school holidays from April to May; this represented 12 fewer days of Easter holidays in the Winter 2013 season, which produced a negative impact on business volume estimated at €16 million.
These two calendar effects had a negative net impact on resorts’ operating incomes of around €7 million, which hampered performance in the first half of 2013.
b) Analysis of the key figures
Business Volume Resorts (corresponding to total sales regardless of resort operating structure) totaled €783 million, compared with €798 million in the first half of 2012, representing a decline of just 1.9%.
Resort Revenues (at constant exchange rates) came to €761 million, representing a decline of 1%. By geographical region:
In the Americas, revenues grew by 5.6% as a reflection of Brazil’s performance,
Revenues in Asia rose by 3.9%, elevated by a 27% increase in the number of customers in China (which offset the closure of the 3 Trident Lindeman Island resort in Australia during January 2012),
The Europe-Africa region recorded a revenue decline of 3.4%, owing chiefly to the 5.5% contraction in France.
Performance in France was held back by the €7 million dip in the CM Business (which set new records last year), and by the 3.9% revenue decline in the ‘Individuals’ segment.
RevPAB (revenue per available bed) advanced by 3.8% due to the improvement of the average price per hotel day at €161 (up 3.6%) and to the stability of the occupancy rate of 71.3%.
Performance indicators
EBITDA Resorts totaled €81 million compared with €85 million. Even so, the EBITDA margin resorts (as a proportion of revenue) held firm at 10.7% compared with 10.9% in the first half of 2012 (despite the sharp decline in European tourism markets).
Operating Income Resorts totaled €49.4 million, compared with €52.8 million in the first half of 2012, negatively impacted by around €7 million from calendar effects in France.
Net Income advanced to €18 million, up from €17 million in the first half of 2012.
Free Cash Flow is structurally positive, reaching €11 million. The Group continued to pay down debt, which dropped from €123 million at April 30, 2012 to €112 million at April 30, 2013. Gearing improved by close to 2 points to stand at 20.9%.
2. Further Club Med Continues to Execute its Strategy: Further Market Share Gains
Acceleration in the Pace of Market Share Gains in France, a Market Experiencing a Steep Contraction
According to CETO[1] figures, despite a steep contraction in the French ‘individuals’ market of 7.3% (business volume) during the Winter 2013 season, Club Mediterranee has continued to gain market share, recording a decline of just 5.7% using the same criteria.
Healthy Resilience in Other Mature European Markets
In the other mature markets, Club Med has continued to outperform: down 4% in Belgium (vs. a market down 6%), down 2% in the U.K. (vs. a market down 3%) and up 6% in Germany (vs. a market up 4%).
Growth in Fast-Developing Markets
Club Mediterranee’s customer base recorded a three-point increase in fast-growing markets (compared with Winter 2012) to reach a total of 167,000, representing 28% of Club Mediterranee’s customer base in the Winter 2013 season.
Mountains: A Competitive Edge
The 4 Trident Valmorel resort that opened in December 2011 in the Tarentaise region of the French Alps has continued to build on the success of its first Summer and Winter seasons, achieving an occupancy rate of close to 83% in the Winter along with a very high satisfaction rate.
The new, upscale chalet-style Pragelato Vialattea resort in the Italian Alps has had a successful start since its December opening, already achieving a promising occupancy rate of close to 80%.
Furthermore, 30% of those traveling to mountain destinations during Winter 2013 were new customers.
China: Set to be Club Med’s 2nd-Largest Market by the End of 2015
Following the opening of Yabuli in 2010 and Guilin during Summer 2013, in line with its business plan, Club Mediterranee plans to open its first seaside resort in Southern China by the end of the year.
China now accounts for the largest number of customers at the following resorts: Kani, Maldives; Phuket, Thailand; Bali, Indonesia and the second-largest representation at Albion Plantation, Mauritius (after French customers).
3. Outlook for Summer 2013
Cumulative bookings at May 18, 2013 (stated in terms of business volume at constant exchange rates) were up 5.5% compared with Summer 2012. At the same time last year, close to two-thirds of bookings had already been made.
All the regions have posted increases to date.
In a very own environment, Europe-Africa posted growth of 4.7% (owing to the slight shift in the timing of Easter holidays into the Summer Season), leading to an impact of close to €9 million. This positive timing effect has generated close to 30% of our individual sales to date. Excluding the impact of the timing of the Easter holidays, bookings have been driven by the opening of two new resorts: Belek, Turkey and Pragelato Vialattea, Italy.
In the Americas, bookings have increased 8.8% owing to the strength of sales in the United States.
In Asia, bookings have risen by 8%, with a key contribution of fast-growing markets, especially Greater China, where bookings are up by more than 40%.
Over the past eight weeks, bookings have posted a slight increase of 0.3% in spite of the reduction recorded in Europe (specifically, the continued contraction of the French market), which decreased by 3% (number of customers) according to CETO figures.
Summer 2013 capacity has been adjusted by 3.5% compared with the previous Summer; however, this reduction varies greatly from one geographical region to another.
Capacity was cut by close to 8% in the Europe-Africa region to reflect the continuing downturn in the tourism market (especially in France).
Capacity is unchanged in the Americas.
In Asia, capacity has increased by 10.9%, which is credited largely to the opening of the Guilin, China resort this Summer.
Lastly, the seven-point increase in capacity in 4 and 5 Trident resorts during Summer 2013 is largely a consequence the season’s successful new resort openings (i.e. Pragelato Vialattea, Italy; Belek, Turkey; Guilin, China). All of these new resorts are upscale and open all-year-round or for at least two seasons.
Source: e turbo news
