c.2013 New York Times News Service
SERRAVAL, France — Fewer “crazy signs.” More karaoke.
That could be the future for Club Med, the French resort operator, which said Monday that it had received a $700 million buyout offer led by its two largest shareholders, an investment unit of the French insurer AXA and a Chinese conglomerate called Fosun International.
The proposed deal gives a Chinese company an unusually visible role in the acquisition and development of a prominent Western brand, which was founded in 1950 by a Belgian water polo player and for years defined the packaged exoticism of beach vacations for Europeans and North Americans. Now, though, the ascent of the Chinese tourist is helping reshape the world’s idea of the ideal getaway.
Club Méditerranée has long been known for the blend of escapist fun and Frenchness in its vacation formula — including the staff’s frequent performance of synchronized, heavily gesticulated dance moves set to pop music.
With Chinese co-ownership, Club Med cannot help becoming a bit less French. It has been hit hard by the euro crisis, during which its name has been borrowed by economists as an epithet for the debt-ridden and austerity-ravaged countries of Southern Europe.
Club Med is looking to emerging markets, especially China, for new customers and new resorts, which it calls villages.
“We have to accelerate our growth in emerging markets, the largest of which is China,” Henri Giscard d’Estaing, chief executive of Club Med, said by telephone Monday. “That takes time, and you need shareholder and management stability. The goal of this agreement is to provide that stability.”
China overtook the United States two years ago as the world’s biggest source of foreign tourists. Mainland Chinese made 70 million overseas trips in 2011. That outpaced the 58.5 million overseas trips by Americans the same year. And last year, China for the first time became the biggest spender in global tourism. Outlays by Chinese travelling overseas reached $102 billion, up 40 per cent from 2011, according to the United Nations World Tourism Organization. Germans and Americans ranked second and third, each spending about $84 billion on their foreign trips, the agency said.
Club Med ventured into China in 2010, opening a village at a ski resort called Yabuli, in the northeastern province of Heilongjiang. Since then Club Med has added a second Chinese village, in the southern city of Guilin, known for its unusual, tombstone-shaped peaks.