Club Med owner Fosun Tourism is boosted by Chinese tourists, reports US$69.5 million first-half profit

Martin Choi

Club Med owner Fosun Tourism Group said on Monday net profit attributable to the company’s shareholders amounted to 490 million yuan (US$69.5 million) for the first six months this year, against a net loss of 254.5 million for the same period last year, mainly down to rising profit from tourism operations.

The company said gross profit for the first half grew 67.7 per cent to 3.015 billion yuan, while revenue grew 35.9 per cent to 9.1 billion yuan, even as a slowing global economy continued to weigh on the tourism industry.

“The whole global economy has been beset by many challenges, as seen in the European market and the tensions between the US and China. This has undoubtedly had an effect on spending in many industries. But the effect has not been felt very strongly in the tourism industry in China,” said Qian Jiannong, the company’s chairman.

“Medium to high-end tourism [in China] in particular is in short supply. The tourism sector in China is actually growing at a faster rate,” he said.

Citing a report from the China Tourism Academy, Qian said domestic tourism spending had grown by 13.5 per cent in the first half of 2019 year on year, while the number of Chinese travellers making outbound trips had grown by 14 per cent.

Qian Jiannong, chairman of Fosun Tourism Group. Photo: Nora Tam

“This means that even as the economy has worsened, compared with the previous year, the tourism sector in China has continued to grow,” he said.

Resorts operated under the Club Med brand contributed revenue of 6.9 billion yuan, an increase of 5 per cent, for the first half of the year. Resorts in Asia-Pacific contributed 1.2 billion yuan, an increase of 7.9 per cent, while resorts in the Americas contributed 1.5 billion yuan, an increase of 14.3 per cent.

The bulk of Club Med’s customers came from Europe, the Middle East and Africa. Those coming from Asia-Pacific and the Americas increased to 53.5 per cent in the first half of 2019 from 51.6 per cent in the first half of 2018. Customers from China increased from 120,239 in the first half of 2018 to 124,627 in the first half of 2019. China was the second largest contributing market both years.

Club Med owner Fosun Tourism swings to profit

The United Nations World Tourism Organisation forecast growth of 3 per cent to 4 per cent in international tourism arrivals this year. The first three months of the year recorded a 4 per cent increase in international tourism numbers.

According to research company ForwardKeys, international departures from Asia and the Pacific grew 6 per cent in the first four months of 2019, driven by outbound travel from China. Air travel bookings from China to the EU grew 17 per cent for the period, while bookings to worldwide destinations increased by 9 per cent.

Meanwhile, at least eight new resorts under the Club Med brand are under construction, with four opening this year, including two in the Alps and one in the Caribbean, said Henri Giscard d’Estaing, chairman of Club Med and vice-chairman at Fosun Tourism.

At least eight new Club Med resorts are under construction. Photo: Shutterstock

In July, a Club Med Joyview resort was opened in Yanqing in Beijing, which will host the 2022 Winter Olympics.

Fosun Tourism made its debut on the Hong Kong stock market on December 14 last year. Its shares were up 4.51 per cent at HK$8.35 at the end of trading on Monday.

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