Holiday mood

Holiday mood

Club Med chief hails reopening in Phuket and says people all over the world are excited about travelling again.

Henri Giscard d'Estaing, president, Club Med SUPPLIED
Henri Giscard d'Estaing, president, Club Med SUPPLIED

Returning to Phuket for the first time in three years, Henri Giscard d'Estaing is busy visiting government officials and business partners on the southern island world-renowned for its white sandy beaches, crystal clear waters, historical old town and delicious food.

Wearing a white linen shirt that matches perfectly with his grey hair, the 65-year-old French businessman looks casual yet energetic as he addresses the crowd gathered to witness the reopening of Club Med Phuket, the vibrant family-centric resort on Kata beach.

Covering a total of 16 hectares (100 rai) of land, the 305-room beachfront resort is one of the original "Grandes Dames" on Phuket's west coast, opened in 1985. It was closed for more than two years as the protracted Covid-19 pandemic hit the Paris-based resort operator -- not to mention Phuket tourism and the local economy -- very hard.

The all-inclusive resort was fully reopened on March 16 after a renovation with newly designed spaces and upgraded entertainment facilities. The reopening is expected to drive a tourism rebound in Phuket where many shops remain shuttered, particularly in Kata, one of the areas hardest-hit by the long absence of tourists.

"We are convinced that Southeast Asia, and more particularly Thailand, are crucial, both from a resort perspective but also from a market perspective, as one of the most dynamic regions in the world," Mr Giscard d'Estaing, president of the French travel and tourism operator Club Med, declares at the reopening ceremony.

"Today is a highly symbolic day for Club Med, and especially for the Asia Pacific business unit. It shows that, despite the deep Covid crisis impacting the whole industry, we were committed to invest in the future and to rejuvenate our iconic Club Med Phuket."

For the first time in it 70-year history, Club Med in early 2020 closed all of its resorts in 70 locations worldwide as the Covid crisis led to lockdowns and border closures. That reduced the company's operating capacity by 57% in 2020, with an equivalent consequence on its turnover.

At Club Med on Kata beach in Phuket, a wide array of activities can be arranged, from boxing to cooking classes and snorkelling. SUPPLIED

"We started by closing our Chinese resorts and then quite rapidly, from the end of January into the beginning of February, we had to close our resorts in North America, Asia and then Europe effectively by the end of April," Mr Giscard d'Estaing recalls.

"By the first week of April, all the resorts of Club Med were closed. And we had to put the company in sleep mode because at the same time, people cannot travel or even go to the offices because of lockdowns."

Club Med Phuket, however, managed to look after all of its staff and pay part of their salaries even though it didn't generate any income. So far, 80% of the people it had employed before have come back, an exceptionally high level in the hotel industry.

"People are extremely important. They are part of the value of this company so we have to make sure we could help them," Mr Giscard d'Estaing tells Asia Focus. "Also, because we were confident that we would reopen one day, we wanted to make sure our team and staff in Thailand in Phuket would be ready to work and welcome our guests.

"This pandemic has been a time of unprecedented challenges, but together we have been able to face it and managed to find a way forward. Therefore, it's time to reinvent once again the experience of Club Med Phuket."

As the only Club Med in Thailand, the Phuket property is promoted internationally and has welcomed tourists from over 40 countries. Although it employs people from various nationalities, 47% of its Gentle Organisers (GO) and 100% of the Gentle Employees (GEs) are locals.

"It is a privilege to have witnessed the development of Phuket internationally," he says. "We are extremely proud to have been in Phuket for 37 years and are reaffirming our ambition to participate in the development of this outstanding region."

'BUMPY ROAD'

Mr Giscard d'Estaing joined Club Med in 1997 as chief operating officer in charge of finance, development and international relations, before being promoted to chief executive officer in 2001. One year later, he was named the president of Club Med.

Prior to Club Med, he was CEO of Evian-Badoit, CEO of the British subsidiary HP Food Lea and Perrins, and held various other executive positions in the Danone Group.

A son of former French president Valéry Giscard d'Estaing, he is a graduate of the Paris Institute of Political Studies and holds a degree in economics. He began his career with Cofremca, where he studied changes in food consumption and their repercussions in terms of marketing and strategy.

He also had a spell in politics, after being elected to the Loir-et-Cher regional council, becoming France's youngest ever regional councillor at the time.

Mr Giscard d'Estaing says he decided to leave Evian and was asked to join Club Med at a time when the latter was facing significant difficulties due mainly to high competition in the tourism industry.

"Evian is the absolute brand for mineral water," he notes with a smile, holding a bottle of of it in one hand. "Club Med (meanwhile) is the only global brand for a holiday. That was something they had in common.

"I felt that recreating the brand leadership and transforming the company was a difficult but exciting challenge," he recalls. "The world was very challenging at that time. When I joined (Club Med) in 1997 and until 2001, the tourism market was growing regularly until the September 11 (2001) attacks. Everything stopped, then there was the bombing in Bali (in 2002) and the tsunami (in 2004) -- you name it. That was a bumpy road."

Thanks to an upscale strategy launched in the 2000s, Club Med has become a global leader of premium all-inclusive holiday resorts for families and active couples. It was in a strong economic position at the start of the crisis, and it has a strong and supportive shareholder with Fosun Tourism of China.

But the Covid pandemic, which was "unprecedented in scale and duration", put Club Med out of business globally for more than a year. "That is a very strong impact but we managed to rapidly adjust our costs so it had limited impact on the results," Mr Giscard d'Estaing says.

"From the third quarter of last year, July to be specific, we managed to recover with the very strong rebound of our American and European business and continued evolution of our product portfolio with even more attractive, profitable locations.

"We managed in the third quarter of last year to have operating results in line with pre-pandemic levels in 2019. Even though the top line was still lower, the mix of products gives us the same level of profitability."

Under Club Med's recovery plan, that has proved successful to create profitable growth, comprises four pillars. First is Upscale, with 97% of Club Med's capacity targeted to be upscale or very upscale this year. This is based on a belief that the market will pick up starting with high-end tourism and families who are dreaming of being able to go on vacation again.

Second is "Glocal", combining a global approach with a focus on markets and products locally.

Third is digitisation as digital technology plays a key role in improving and optimising the customer experience. Club Med's Happy Digital involves positioning digital technology as a facilitator, an amplifier of the customer experience before, during or after the stay.

Fourth is Happy to Care, which aims at eco-certifying 100% of the group's new resort construction and daily operations with Green Globe.

Occupancy rates at Club Med currently vary by location, depending very much on border restrictions. "The more open the border, the higher the occupancy. For example, destinations like the Maldives, we have been able to maintain occupancy above 70% post-Covid. For those countries with border restrictions, and therefore pretty much reliant on domestic markets, it would be lower, between 40% and 60%," he says.

Mr Giscard d'Estaing cites "supporting the team" as his management style. "I am fortunate to have a very good management around me, with geographical areas that have their capacity for autonomy and decision-making and that are close to the field," he notes.

"Our teams, both in the resorts, in the headquarters and our commercial offices, are integral to our businesses. My role is to support and work with the team, so we can react and make decisions as quickly and as best as possible on the ground."

BACK TO ASIA

Mr Giscard d'Estaing makes a clear statement that Club Med is now back in Asia and "stronger than ever".

Eight out of the 17 new resorts the company had already planned to open around the world from 2021 to 2023 are in China.

"The acceleration of globalisation will increase our market share," he says. "Being global is a clear asset. It allows us to balance markets and destinations versus geopolitical, climatic or economic risks and to secure growth and profitability."

A week before the reopening of the resort in Phuket, Club Med Bintan, the Indonesian island next to Singapore, reopened its doors to welcome guests, thanks to the vaccinated travel lane (VTL) travel scheme.

Club Med Cherating in Malaysia reopened in October and occupancy rates are above pre-pandemic levels, he says, adding that Club Med Tomamu and Club Med Kabira have been continuously serving Japanese guests.

"We have accelerated our development in Greater China with the opening of a Club Med resort in Lijiang, the Unesco-listed location in southern Yunnan province, in September and Club Med Changbaishan in December," says Mr Giscard d'Estaing.

In addition to the new properties, Club Med Bali will reopen around mid-August.

Globally, Club Med expansion gained momentum last year with four new openings including Club Med La Rosière (French Alps), Club Med Exclusive Collection Seychelles (Africa), and the beautiful Club Med Québec Charlevoix, the company's first resort in Canada.

Meanwhile, renovations were completed at four other locations: Club Med Albion (Mauritius), Club Med Peisey-Vallandry (French Alps), Club Med Pragelato-Sestriere (Italian Alps), and Club Med Marrakech (Morocco).

"Looking into the future we have an aggressive pipeline with 24 extensions and renovations by 2024 including the one not far from here -- Club Med Borneo Kota Kinabalu," he says. Others include resorts in Spain (Club Med Magna Marbella), the French Alps (Tignes and Val d'Isere), the Italian Alps (San Sicario), and North America (Club Med Utah).

Europe is still the biggest revenue generator for Club Med with 20 ski resorts located in France, Italy and Switzerland. But Asia is starting to play a very big part with China being one of the top markets in the world and one of the top sources of clients for Club Med.

"Southeast Asia is one of the most dynamic parts of our business. The revitalisation of the icon of Phuket marks a new chapter in Club Med development in this part of the world," he says with confidence.

Mr Giscard d'Estaing believes that some segments will rebound this year but the overall tourism industry "still faces lots of uncertainties".

"What we are observing now is that as soon as people can travel, can have holidays, especially families, I believe that will have a double effect," he says. "First is the psychological effect. Families that have been locked in flats in big cities, kids not able to go to school, friends who can't have holidays together -- these people are all looking to travel and enjoy again."

Second is the financial effects: "Many families have not spent much because they couldn't go out during this period. They have savings to use for their next holidays."

As many people are preparing to resume travelling, how about the president of Club Med? Asia Focus asks where Mr Giscard d'Estaing would go for his next holiday.

"My next holiday is next week," he replies at the time of our interview. "I'm going with my family to a new Club Med ski resort, Grand Massif Samoëns Morillon in France. We'll go into a chalet where we developed private houses that are managed by Club Med."

As the top executive of the world's leading tourism operator, Mr Giscard d'Estaing says he has seen most of the beautiful places around the globe. Yet, he believes there are still lots of spectacular places to see.

"I would say I have one dream. I believe Africa has a different culture and nature," he says. "I believe it will be one of the future travel destinations and we have a project there, one on the East coast of South Africa, that will combine beach and safari.

"Now we are building it from scratch. It usually takes three to four years for the construction. And we have another project in West Africa which has the oldest culture in Africa, which is the Budu culture."

Club Med already has a footprint in West Africa, including Senegal, but nothing in southern Africa. "I believe that this is where we probably can expect more," Mr Giscard d'Estaing points out.

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