Club Med plans for 30pct Asia revenue growth

KUALA LUMPUR, April 13 (AFP) – French vacation group Club Mediterranee said Tuesday it hoped for 20-30 percent revenue growth in Asia this year after a bumpy 2003, with plans to expand in the region to tap the booming tourism market.

Club Med, which has 10 resorts in the region, aims to open a third village in Maldives this year and is eyeing new finds in Vietnam, India, China and Sri Lanka, said its Asia Pacific president and chief executive Joel Tiphonnet.

Its Cherating Beach resort in Malaysia will reopen Friday after being closed since November for a USD 5 million overhaul as part of a drive to woo tourists, after business was hit last year by the Severe Acute Respiratory Syndrome (SARS) outbreak in the region, he said.

“We had a drop of about 20 percent in terms of revenue last year. SARS was the worst crisis we’ve ever had because people didn’t want to move from their homes,” he told AFP.

“But today, we are recovering extremely well. The Australians are coming back to (Indonesia’s island of) Bali very strongly. The Japanese who are very careful normally, are travelling a lot. Even the bird flu that came this year didn’t really affect the business. Singapore, for example, is doing 50 percent more than last year.

“I would expect to gain at least 20 percent growth this year but it’s still too early to say. Summer is still to come but so far, it is starting well, so we could have a plus 30 percent compared to last year.”

Club Med has two resorts each in Indonesia, Japan, and Maldives and one each in Australia, Thailand, Malaysia and Tahiti.

Tiphonnet said the Asia-Pacific operation contributed some 15 percent to global revenue and more in profits because the resorts were more up-market.

Each year, its resorts in the region host some 200,000 travellers with the bulk coming from Asia and only a quarter from Europe and the United States.Japan is its top market, followed by Australia, South Korea, Hong Kong, Singapore and Malaysia. China is also gaining importance after Club Med launched its commercial office there in September, he said.

Despite the terrorism threat, Tiphonnet said there has been a rebound in travelling and strong economic growth in the region would propel Club Med’s growth.

“Terrorism is a big issue but the risks have been (taken into account) and the main driver is the economic situation,” he said. But he noted that travel patterns had shifted with consumers making reservations on shorter notice and for shorter stays.

Club Med reinforced security after the Bali bombing in October 2002 which killed some 200 people, he added.

On expansion plans, Tiphonnet said Club Med was assessing opportunities in Vietnam, Sri Lanka, India and China but cited location and accessibility as crucial factors.

“We are negotiating a third village in Maldives, hopefully this year,” he said.

“We would love to have a village in China but it is too early. Many people go to China today for shopping and sightseeing and those in China with money prefer to go elsewhere, so we have to study a bit more carefully.”

Tiphonnet said the revamped Malaysian village, which first opened in 1980, would be the group’s flagship resort in the region with new facilities and services including a spa village and circus activities.

It targets 10 percent growth in revenue to around EUR 33 million for the Malaysian resort this year.

Club Med is the world’s 10th largest hotel chain, with more than 100 resorts in 40 countries and over 20,000 staff worldwide.