French Club Med to be taken over by Chinese owners and guests
The Chinese takeover bid comes just in time for Club Med’s courtship of Chinese visitors, which it sees as the only viable demographic to ensure the resorts’ growth at this time.
The decline in European fortunes has kept the continent’s tourists pinching pennies. That’s made it hard for Club Méditerranée, a French resort company known originally for its cheap and cheerful beach vacations, to boost profits by turning its beach hut clusters into luxury resorts. To offset the fall in European spending, Club Med has been courting upscale Chinese tourists. A takeover bid from AXA Private Equity and Fosun International Ltd (paywall), a massive Chinese conglomerate, looks like a vote of confidence in that strategy.
Club Med, which operates around 70 resorts around the world, said that current management would stay if the bid goes through. Its shift in strategy has seen it upgrade existing resorts and closing others, as well as opening luxury shops in its resort hubs. It has also opened more resorts in Asia.
That’s geared in part toward Chinese tourists, who spent $102 billion in 2012—much more than the nearly $84 billion each spent by Germany and the US, and an increase of 40% on the previous year, according to the UN World Tourism Organization. German and US spending increased only 6%. Southeast Asian countries are particularly popular with the Chinese, who are also avid and discerning shoppers.