Club Med, owned by Hong Kong-listed Fosun Tourism Group is looking for greenfield opportunities in Malaysia, Thailand, Vietnam, Indonesia, and the Philippines to capitalise on the anticipated travel rebound.
According to Vincent Ong, Club Med's senior vice-president of commercial Southeast Asia (SEA) and Marketing Asia Pacific (APAC), the France-based resort chain operator is looking for investors and partners to help with the expansion.
The expansion of Club Med throughout SEA will be critical in continuing the brand's journey in APAC, he said.
"This is a five-year strategy. Club Med is looking for new deals in Asian countries and is targeting Asian countries for key opportunities. We're also on the lookout for future projects.
"We need to expand and diversify our presence in SEA because we expect Chinese visitors to return next year. We already have a resort on the Peninsular Malaysian Peninsula and another in East Malaysia. Vietnam, Thailand, Indonesia, and the Philippines will be the priority markets from now on. Our criteria for new resorts is always about the right location and with the right partner," Ong told NST Property.
Ong said that Club Med is open to potential new destinations in Malaysia, which is consistent with the company's approach in all SEA/APAC markets.
He said that Malaysian investors are also welcome to partner with Club Med to bring its tried-and-true formula to regional priority destinations outside of Malaysia.
Ong said that the Malaysian expansion would have to complement the company's flagship resort, Club Med Cherating in Kuantan, Pahang, and its second opening, Club Med Borneo Kota Kinabalu in Sabah.
He said that Club Med Borneo Kota Kinabalu, the company's first SEA greenfield beach resort, will pave the way for this regional expansion.
"If any of our partners can provide us with a good proposal, we will gladly consider it. Nothing is off-limits. We are also open to the idea of someone having land and wanting to develop a resort with us and open it under the Club Med brand," he said.
Club Med, the pioneer of premium all-inclusive vacations, expects Club Med Borneo Kota Kinabalu to open in late 2023 or early 2024.
It is setting up the resort in Kuala Penyu in collaboration with the asset owner Golden Sands Beach Resort City (GSBR) Sdn Bhd.
According to Ong, the 41-acre resort with 400 rooms will reveal a brand new destination encapsulating Sabah's beauty and potential.
"Club Med is confident in capitalising on the vast untapped potential of this pristine location, which is only six hours by flight from key Asian markets," he said.
GSBR, based in Sabah, was founded by like-minded investors to bring Club Med to Borneo.
In a press statement issued in September, GSBR's managing director, Peter Wong, stated that Club Med has been an outstanding partner in its collaboration for the Club Med Borneo Kota Kinabalu resort.
"They bring expertise in crafting unique experiences at resorts, and they have the right savoir-faire to bring them to life and elevate stays in the resort. We have the utmost confidence in Club Med's capabilities of creating a sense of destination at the Borneo Kota Kinabalu resort with upmarket designs that evoke emotional connections for guests with the destination, offering them the iconic Club Med experience in a site that is simply paradise," he said.
The Club Med company's success can be attributed to its ability to directly market and distribute its resorts, as evidenced by a consistent five per cent year-on-year growth and a steady 1.4 million guests pre-pandemic, bringing them a total of 1.7 billion Euros in business volume in 2019.
Occupancy rates around the world reflected this success, with pre-pandemic averages of 75 percent in the East, South Asia, and Pacific regions, and 76 percent and 78 percent in Europe-Africa and North America, respectively.
Club Med Cherating, with 300 rooms, opened in 1979 and it was Club Med's first resort in Asia.
The 85-hectare site is sandwiched between a tropical forest and the South China Sea.
NST Property reported recently that the owners of Club Med Cherating are looking to sell the property after it identifies a strategic partner.
Ong had said that the sale is part of the group's strategy of selling assets at a reasonable price while remaining asset-light.
He clarified that Club Med's intention was not to cash out of Malaysia by selling the property, but rather to enter into a sale-and-leaseback agreement with the new owner to continue managing it.
"This resort is still a priority for Club Med, and it is in line with the global trend of adopting an asset-light strategy. Club Med is currently seeking partners and potential investors to assist us in revitalising, renovating, and expanding the resort," he said.
According to Ong, Club Med Cherating is currently at full capacity due to the lifting of the interstate travel ban imposed by the Covid-19.
Malaysia resumed interstate and international travel on October 11, after more than 90 per cent of the country's population had been completely vaccinated.
Club Med Cherating reopened on October 15, 2021. The room rate starts from RM930++ per adult for a three-day and two nights stay at the resort.
Outlook
Despite a difficult 18 months due to the pandemic, Ong is optimistic about the future of the hospitality and tourism industries.
"We expected a rosy outlook for 2021 in 2020, but what we got was delta. But there are more reasons to be optimistic for 2021. Travel will come back very sound. People are travel starved and they want to come out and travel.
"We believe that 2022 will return to 2019 levels by the second half of the year, with leisure travel being the first to recover. When it comes to leisure travel, decisions are always made from the heart. People want to go places where they can be happy with their families and have a good time," he said.
Club Med, according to Ong, has worked hard in the last 18 months to keep its head above water.
"One thing that worked in our favour was that we came into the crisis strong. In terms of profitability, 2019 was our best year yet. We had our best year in winter 2020, which is between December 2019 and February 2020, just before the Covid-19 hit. So we came into this crisis with a lot of cash.
"The second point to mention is that we have a very strong and supportive owner in the form of Fosun Tourism Group. They were there for us throughout the crisis. Third, Club Med is very international. If Asia is struggling, Europe will be picking up the slack," he said.
Ong said that in the last 18 months, it was also about making the most of the new Club Med locations.
The resorts were getting a lot of new guests, while domestic travel was still going strong, he said.
Club Med operates nearly 70 resorts around the world.
Fosun Tourism Group is continuing to aggressively expand the Club Med resort presence, to significantly increase its global footprint in the coming years, added Ong.
It was reported that 12 existing resorts worldwide are scheduled to complete renovations by June 30, 2024, with an increase in annual capacity of about 26 percent compared to 2019.