Club Med Reports Third-Quarter 2013 Revenue
Club Med Reports Third-Quarter 2013 Revenue
- Village business volume at constant exchange rates up a reported 0.3% to €342 million
- Number of 4/5 Trident customers up 5.3%, an additional 11,000
- Year-to-date summer bookings at September 7 up 0.7%, supported by the growth of Asia and the Americas
- Encouraging winter 2014 bookings
MIAMI--(BUSINESS WIRE)-- Commenting on Club Med's performance in North America, President and Chief Executive Officer, Xavier Mufraggi said:
"The financial results in the third-quarter of 2013, which show a 6% increase in revenue in the Americas, illustrate that despite today's harsh economic climate, Club Med continues to be a leading force in the all-inclusive vacation industry. Exceedingly more U.S. and Canadian travelers are looking for different vacation options outside of the Caribbean and Mexico, and with 71 all-inclusive resorts worldwide, Club Med stands poised to meet this demand. The ski market has shown especially great potential, with the announcement of the newest mountain resort, Val Thorens, set to open in Dec. 2014. Additionally, Club Med differentiates itself through innovative product offerings for families, such as the Active Wellness program available at Sandpiper Bay, Fla., and our competitive pricing strategy, 'Kids Under 4 Stay Free,' which has had great success since its May debut."
I - BUSINESS PERFORMANCE
For the first nine months of the year (November 1, 2012 to July 31, 2013), business volume amounted to €1,125 million versus €1,133 million in the prior-year period, down 0.8% at constant exchange rates.
In the third quarter, business volume rose by 0.3% at constant exchange rates due to the positive impact of the Easter holidays in May, offsetting the decline in business performance in July, especially in the French market.
Capacity was adjusted downward by 4.5% over the third quarter to address a downturn in the economic situation, with a 7.5% drop in Europe-Africa (including the permanent closure of the 3-Trident seasonal villages of Otranto in Italy and Beldi in Turkey, the temporary closure of Chamonix in France, the extension of the closure of Djerba-La Fidèle in Tunisia, as well as the opening of the 4-Trident villages of Belek in Turkey and Pragelato Vialattea in Italy).
The number of customers declined to 319,000 from 325,000 over the quarter, down 1.7% for a 4.5% reduction in capacity (of which a decrease of 12,000 customers in Europe-Africa, down 5.4% for a capacity reduction of 7.5%). The number of 4 and 5-Trident customers continued to increase, with 11,000 additional guests (of which 4,300 customers in Europe-Africa), or an increase of 5.3%. They accounted for 67.1% of all customers, a 4.5 point increase over the 62.6% recorded in the third quarter 2012.
Group revenue in the third quarter 2013 stood at €317 million versus €332 million in the prior-year period, down 1.5% at constant exchange rates.
Villages revenue (excluding property development revenue) declined by 2.1% at constant exchange rates in the third quarter, reflecting the slowdown in business in July and the increased weight of managed villages following the opening of Belek in Turkey.
II - THIRD-QUARTER HIGHLIGHTS
Further market share gains in France in a continued deteriorating market
In a deteriorating French Individuals market down 1.4% (in business volume) according to CETO1 data, following the departures from May to July 2013, Club Méditerranée continues to gain market shares with stable growth up 0.1% based on the same criteria. However, in the Groups market, Club Med Business has suffered from a marked drop in its business volume, which achieved record levels last year due to a number of unique transactions.
Successful opening of Belek in Turkey
On June 13, 2013, Club Méditerranée inaugurated the 4-Trident village of Belek in Turkey that opened on April 20, 2013. In the third quarter, this managed village attracted 29 different nationalities (including 46% French customers) and recorded an occupancy rate close to 90%.
3-year renewal of partnership with Transavia France
Club Méditerranée has renewed its 3-year partnership with Transavia France to transport its customers on medium-haul flights. This partnership, which started in 2007 with the creation of Transavia, aims at strengthening customer relations by providing high-quality customized products, particularly by developing departures outside the Paris area and by adapting commitments and capacity.
This 3-year renewal of the partnership gives both companies visibility and stability and offers prospects of developing the air programs.
III -POST THIRD-QUARTER CLOSING HIGHLIGHTS
Update on the tender offer
On July 16, 2013, the Autorité des Marchés Financiers (French Markets Authority, "AMF") cleared the tender offer from Gaillon Invest for Club Méditerranée's shares and OCEANEs (bonds convertible and/or exchangeable into new or existing shares).The tender offer was opened on July 17, 2013.
Following the appeals filed with the Paris Court of Appeal on July 24 and 26, 2013 seeking annulment of its decision, the AMF announced on August 6, 2013 the extension of the tender offer, which was initially supposed to close on August 30, 2013. In practice, the closing of the tender offer is deferred at least eight days after the Court judgment on the annulment appeals is delivered.
Laying of the first foundation stone in Val Thorens
On August 28, 2013, the first foundation stone of the 4-Trident village of Val Thorens, which is expected to open in December 2014, was laid. This 384-room village, located in the highest station in the prestigious French ski area of the 3 Vallées, represents a total investment of €80 million. It will be run by Club Méditerranée under a 12-year renewable lease agreement and will generate around 240 direct jobs.
IV - OUTLOOK
Year-to-date Summer 2013 bookings, by issuing market
Year-to-date bookings in business volume at September 7 have slightly increased over last summer by 0.7% at constant exchange rates, with a 3.8% reduction in capacity. At the same sate last year, year-to-date bookings represented more than 90% of the total for the entire Summer 2012 season.
Year-to-date bookings are up in the Americas and in Asia:
In the Americas, bookings are up 6% especially due to the strong sales in the United-States. The decrease of 5.2% over the past eight weeks is due to the phasing in group bookings in Brazil.
In Asia, bookings are up 8.4% due primarily to fast growing economies, particularly China, where bookings are up by over 28%.
Year-to-date bookings in the Europe-Africa region are down 1.3% for the season, due to the effects of the sustained deterioration in the European markets, especially in the French market which, according to the latest CETO figures available at the end of July for the summer season, is down 6.6% in business volume.
Over the past eight weeks, bookings are down 22.1%, accounting for a drop in business volume of around €10 million. The decrease during this period is due to reduced demand for of Egypt and Tunisia's destinations as well as the continuing downturn in the French market.
Encouraging Winter 2014 bookings
Bookings to date are encouraging and have benefited from an active early booking policy in all geographic regions. At the same date last year, more than a third of winter bookings had been booked.
1 French Tour Operators Association
The Zimmerman Agency
Amanda Russo or Mackenzie Monteiro, 850-668-2222
KEYWORDS: United States North America Florida
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