Club Med Americas Sandpiper Bay

Club Med Americas
Sandpiper Bay
Sandpiper Bay – Florida
October 21, 2011
Agenda
Americas
Strategic overview
South America
Overview
North America
From Defense to Offense
HENRI GISCARD D’ESTAING
Chairman and Chief Executive Officer
MICHEL WOLFOVSKI
Executive Vice President and Chief Financial Officer
XAVIER MUFRAGGI
Chief Executive Officer – North America
JANYCK DAUDET
Chief Executive Officer – Latin America
2
America in Club Med
Customers:
Villages:
4 main outbound countries
11 resorts in Club Med portfolio
2010
2011
US
74
82
Brazil
68
73
Canada
29
34
Argentina
13
16
(In ‘000)
Sandpiper Bay 4 Tridents
Cancun Yucatan 4 Tridents
Ixtapa Pacific 4 Tridents
Columbus Isle 4 Tridents
Turk and Caicos 3 Tridents
Punta Cana 4 Tridents
La Caravelle 4 Tridents
Les Boucaniers 4 Tridents
Itaparica 3 Tridents
Mexico & Others
12
13
Trancoso 4 Tridents
TOTAL
196
217
Rio das Pedras 4 Tridents
3
Status post 2001
2001
2002
Number of Villages
19
14
Capacity 4 Tridents
27%
26%
Customers (In ‘000)
284
233
o/w Customers 4 & 5 Tridents
20%
27%
Revenues (In €m)
317
220
(34)
(41)
Operating Income
(In €m)
Survive
Stop the losses
Change the model
4
Strategic decision: Is there a room for Club Med
in the Americas ?
Club Med Threats in America
post 2001
Club Med Strengths
A huge potential market in all inclusive
upscale family segment:
USA/Brazil/Canada
Product positioning not clear enough:
For couples, Fun? Families?
Villages not upscale enough
Disparity of products
Not suitable with American standards
Fierce copying from competition
Copy of the Club Med Concept:
Super Clubs, Sandals etc…
Going one step further with the allinclusive
BUT
Club Med offer fits with American
customers
Worldwide Geographical spread with
international customers filling up villages
in unique locations
Unique experience in kids Clubs: best
family experience
5
Huge shift already achieved
Actions to fit Club Med
Worldwide Upscale Strategy
Achievements
9 villages closed + 1 opened
Product repositioning to fit the market
6 villages upgraded in 4 Tridents
84% of capacity in 4 Tridents in 2010 vs
Upgrading the villages
Substitution of clientele to upscale
26% in 2001
70% of customers in 4 & 5 Tridents
Headcount : -21% vs ‘05 in North
Cost optimization
Specific Actions versus
America’s situation
Shift from triple clientele to
family/couples only
America
First results
64% of families vs 50% in 2001
Launching Total All Inclusive in 2005
Regain footprint with resorts in the USA
Regain leadership position toward
competition in the USA
Sandpiper: US upscale Flagship
6
Portfolio post 2001 & actions
RENOVATED
UPGRADED
CLOSED
Villages in 2001
Permanent
Premium
Critical
size
Actions
Copper Mountain 3T
NO
NO
NO
Closed in 2002: only opened in winter
Crested Butte 4T
NO
YES
NO
Closed in 2006: only opened in winter
Huatulco 3T
NO
NO
YES
Closed in 2001
Paradise 4T
YES
NO
NO
Closed in 2004
Playa Blanca 3T
NO
NO
NO
Closed in 2001: only opened in winter
Sainte Lucie 3T
YES
NO
NO
Closed in 2001
Sonora Bay 3T
NO
NO
YES
Closed in 2001
Varadero 4T
YES
YES
YES
Closed in 2003
Mexican Villas
YES
NO
NO
Closed in 2008
Buccaneer s Creek 2T
NO
NO
NO
48 M€ to upgrade from 2 to 4 Tridents in 2005-2006
+ product repositioning : from single to family segment
Cancun 3T
YES
NO
YES
24 M€ to upgrade from 3 to 4 Tridents in 2006 -2007
+ product repositioning : from single to family segment
Caravelle 3T
NO
NO
NO
20 M€ to upgrade from 3 to 4 Tridents in 2005-2006
+ extension to come
Ixtapa 3T
YES
NO
YES
19 M€ to upgrade from 3 to 4 Tridents in 2007-2008
Punta Cana 3T
YES
NO
YES
28 M€ to upgrade from 3 to 4 Tridents in 2007-2009
Sandpiper 3T
YES
NO
YES
21 M€ to upgrade from 3 to 4 Tridents in 2010-2012
Itaparica 3T
YES
YES
YES
fits to strategy
Turkoise 3T
YES
YES
NO
Room lifting in 2003
Colombus Isle 4T
NO
YES
NO
fits to strategy – renovation/extension project
Rio das Pedras 4T
YES
YES
YES
Renovation started in 2010+ extension to come
7
Where are we today ?
Worldwide main events
9/11
H1N1
Virus
Gulf War
Global financial
crisis
2001
2002
2004
2006
2008
2010
2011
Number of Villages
19
14
14
12
12
11
11
Capacity 4 Tridents
27%
26%
29%
32%
58%
77%
84%
Clients (In ‘000)
284
233
268
222
211
196
217
Clients 4 & 5 Tridents
20%
27%
32%
29%
47%
68%
86%
Revenues (In €m)
317
220
203
196
181
176
196
Op. Income – Villages
(34)
(41)
(6)
(2)
(6)
(3)
(In €m)
profit
Profitable
in 2011
Moving to a profitable & sustainable model
Huge shift already achieved
8
2011-2015 drivers: Working on Seasonality issue
Seasonality in profitability
Areas for improvement in Summer
Operating Income Villages
Reported figures in €m
23
15
12
W09
Developing Club Med Business Offer
S09
(20)
W10
S10
(18)
W11
Launching new concept : Golf and Tennis
Academies
Increasing number of Europeans clients
1/3 of hotel days
9
2011-2015 Key drivers
Villages capacity
Opening of a 4th village in Buzios (Brazil)
•
•
Inbound customers (Brazil/Argentina)
International customers
Sandpiper Bay – Phase 2
•
Fully renovated as of Dec. 22, 2011 (Winter 12)
Capacity Optimization
•
•
•
•
•
•
Columbus renovation + 60 new Deluxe Condos (Winter 13)
Ixtapa/Cancun 14 Villas or condos
Sandpiper phase 3: 30 new deluxe rooms
Boucaneers : capacity increase of 60 deluxe rooms
Caravelle: capacity increase of 36 deluxe rooms
Rio das Pedras: capacity increase of 22 rooms and renovation
Market and pricing
Market potential
•
•
Brazil growing market
Canada: A mature country to reach 60% sales contribution in 2015
Pricing initiatives
•
•
Structural: coming from new upscale capacity and room reclassification
Pricing project: reassess pricing practices to improve BV STS
Mid Term
Additional villages : opening of a mountain bi-seasonal village
(managed)
•
•
Europeans in summer
Easy access
10
Conclusion
Huge shift made in America since 2001
Coming back to profitability in this zone is only a milestone
Time to be offensive
Growth drivers: optimizing existing capacity, work on prices
Development phase : New villages
11
South America overview
Sandpiper Bay – Florida
October 21, 2011
Potential Market Latin America
Brazil
Brazil´s population: 190 million
Club Med´s clients: 73 thousand
Potential clients: 2.18 million of people
Argentina
Argentina´s population: 40 million
Club Med´s clients: 16 thousand
Potential clients: 1.20 million of people
Mexico
Mexico´s population: 113 million
Club Med´s clients: 11 thousand
Potential clients: 1.76 million of people
Social Classes: A+, A, B+ and B
13
Sales Distribution 2010 - 2011
Brazil
2010
40%
60%
2011
49% (direct Sales)
51% (indirect sales)
Argentina
Mexico
2010
29%
71%
2010 2011
69% 72% (direct sales)
31% 28% (indirect sales)
2011
32% (direct sales)
68% (indirect sales)
Shop in Shop: Club Med Corners
Definition: Club Med Corners inside tourism agencies
Objective: Strengthen the brand / direct link with customers / increase sales
2 opened Club Med Corners : Belo Horizonte (MG) ; São Paulo (SP)
4 future projects: Campinas (SP) ; Porto Alegre (RS); Curitiba (PR); Buenos Aires
(Argentina);
Belo Horizonte, BH
14
Brazil: Macroeconomic indicators
GDP
Inflation Rate
10
25
7,5
8
20
6
4
4,2
15
2
10
0
5
-2
5,9
5,4
0
Brazil is in a very favorable economic time, with prevision of growth rate of 4%. The
inflation rate is under control. The outlook for the future continues to be favorable,
with high growth economy.
15
Brazil: Incoming Tourism
Foreign tourists (mn)
7,2
8
7
6
5,4
5
4
3
2
0,15
0,10
1
0
Tourists Resorts
Tourists BRA
Brazilian Govern expects to receive over 7 million people in 2014, right after our
next opening: Peró in 2013
16
Next Resort in Brazil – Buzios, Peró
Club Med Pero – P&L 2013
4th Resort in Brazil
Localization: Peró Beach
(Cabo Frio, RJ) next to
Buzios
Beach 5 Km longer, larger
than Copacabana
Situaded in a natural
reserve
4T Resort with a 5T Luxury
Space
Family Resort
400 apartments
Opening: End of 2013
17
North America
from Defense to Offense
Sandpiper Bay – Florida
October 21, 2011
We have been in defense mode since 9/11/2001
Surviving
Repositioning
Growth
DEFENSE
OFFENSE
9.6%
+14.6M
9/11
Turkoise
13
20
Pl
an
20
12
20
11
20
10
20
09
20
08
20
07
20
06
20
05
20
04
20
03
20
02
Columbus
ROCV Pub
19
We have been in defense mode since 9/11/2001
Surviving
Repositioning
Growth
DEFENSE
OFFENSE
9.6%
Phase 1 Surviving 2001 - 2005
- Selling Assets
- Restructuring
9/11
Varadero
Paradise
St Lucie
Huatulco
Playa Blanca
Sonora Bay
20
11
20
10
20
09
20
08
20
07
20
06
20
05
20
12
Columbus
Crested
20
04
20
03
20
02
Copper
ROCV Pub
20
We have been in defense mode since 9/11/2001
Surviving
Repositioning
DEFENSE
Phase 1 Surviving 2001 - 2005
- Selling Assets
- Restructuring
Phase 2 Repositioning Upscale
Family 2005 - 2010
- Resorts Portfolio Renovation
- New Marketing/Sales strategy
St Lucie
Caravelle
Buccaneers
Turkoise
13
20
Pl
an
20
12
20
06
20
05
Columbus
20
11
Punta
Crested
20
04
20
03
20
02
Copper
Sandpiper Bay
Ixtapa
20
10
Sonora Bay
20
09
Playa Blanca
Cancun
20
08
Huatulco
20
07
9/11
Varadero
Paradise
ROCV Pub
21
2005 – 2010: A defensive strategy to
become sustainable
Sandpiper Bay – Florida
October 21, 2011
KEY DRIVER #1: renovate our Resorts to give a financial
step change…
*
AFTER (2013)
BEFORE (2009)
CURRENT (2011)
3
4
4
Average # of beds
652
728
988
Capacity (in ‘000s)
192
232
361
Average price (per hotel
nights)
$115
$135
$137
Duration of the season
295 days
319 days
365 days
REVPAB
$77
$97
$83
GOP *
$1.9m
$6.6m
$11.0m
+ 17%
X 3.5
Gross Operating Profit
GOP B-Case planned for
Y13 should be closed to
be achieved in Y12
New Club
Med model
28.9 M$ invested in Sandpiper renovation
Source: Hyperion Planning
23
… and deliver a consistent Premium Promise
Global Customer
Satisfaction in North
American Villages
+2pts

vs last 3 years
Sandpiper 4/5
Columbus 4.5/5
Turkoise 4/5
Ixtapa 4.5/5
Punta Cana 4.5/5
Cancun 4.5/5
Customer Feedback measurement
TripAdvisor rating in September 2011
Customer Satisfaction and « Word of Mouth » effect are the heart of our
Resort Renovation Strategy
24
KEY DRIVER #2: Successful positioning as upscale family
oriented
USA – Customer typology evolution
Canada – Customer typology evolution
80%
80%
66%
70%
63%
65%
64%
64%
64%
70%
60%
56%
60%
50%
46%
48%
56%
60%
49%
47%
50%
40%
40%
30%
30%
20%
30%
29%
24% 22%
24%
23%
23%
20%
22%
30%
21%
19%
20%
19%
20%
20%
21%
44%
35%
33%
33%
37%
32%
30%
10%
15%
17%
42%
33%
33%
35%
33% 30%
31%
26%
25%
16%
16%
15%
30%
31%
27%
27%
14%
15%
14%
2009
2010
2011
YTD
24%
25%
19%
15%
53%
58%
32%
20%
20%
42%
52%
62%
59%
10%
18%
16%
0%
0%
2000
2001
2002
2003
2004
Families
2005
2006
Couples
2007
2008
Friends/Singles
2009
2010
2011
YTD
2000
2001
2002
2003
2004
Families
2005
2006
Couples
2007
2008
Friends/Singles
More than 60% of upscale “Family” Customers in North America (+18 pts
in the US and + 27 pts in Canada vs. 2000)
Source: Enterprise Guide
25
KEY DRIVER #3: Strong shift of distribution towards direct
sales and targeted Travel Agents…
USA
CANADA
100%
100%
Total Indirect
Total Direct
Total Indirect
90%
90%
87%
88%
Total Direct
87%
83%
80%
80%
80%
70%
70%
76%
70%
64%
59%
53%
50%
47%
64%
36% from
Internet
56%
60%
50%
60%
52%
48%
65%
60%
50%
44%
41%
18% from
Internet
35%
40%
40%
36%
36%
40%
30%
30%
30%
24%
20%
20%
13%
20%
10%
13%
12%
2004
2005
17%
10%
0%
0%
2004
2005
2006
2007
2008
2009
2010
Forecast
11
2006
2007
2008
2009
2010
Forecast
11
64% direct sales in the US vs. 47% in 2004, from 13% to 35% of direct sales
in Canada in 5 years
Source: Enterprise Guide
26
… which permits a main commission sales decrease and
foster our Marketing Strategy digitalization
1
A cost optimization thanks to our new
distribution…
2
…and a main shift in our Marketing
strategy…


- 5.5 M$ in Sales
commissions between 2005 and
- 6.6 M$ in
Marketing budget between
2010
2005 and 2010
3
…with a strong reallocation in digital
spending
From 0 to 60% of
media
spending online
between 2005 and 2010
27
2011-2015: Moving To Offense
Sandpiper Bay – Florida
October 21, 2011
The North American equation for Club Med in the next few
years
A Strategic
Market
AMN #1 market in
the World (Around
$16MM*) for All
Inclusive vacations…
… with a strong
competition in the
Caribbean
*Source: PhoCusWright Travel Agency Distribution Landscape
29
The North American equation for Club Med in the next few
years
A new Customer
Behavior
A Strategic
Market
The Club Med challenges
 BRAND: Still not known for what it
has become
 Premium all inclusive resorts
an enormous market but that
has become a commodity
 SEARCHED by clients through
OTA / websearch
AMN #1 market in
the World (Around
$16MM*) for All
Inclusive vacations…
… with a strong
competition in the
Caribbean
 BOOKED by Clients still a lot
from TO after checking “Word
Of Mouth” and Tripadvisor
 SHARE OF VOICE: too low to
reverse the trend
and demonstrate our difference
 DISTRIBUTION: Low/no visibility in
TA, OTA, TO
 PRICE: over market competition
with aggressive promotions policy
*Source: PhoCusWright Travel Agency Distribution Landscape
30
RECRUITMENT
LOYALTY
UPSCALE
STRATEGY
GLOBAL
TRENDS
…but the structural basis are solid and opportunities exist
 Club Med North America is in a positive dynamic growth in
Customer & BV
 In 2012, Club Med North America will completely achieve its
upscale strategy in terms of Customers

87% of Customer will book a 4-5T Resort whereas they were 68%
in 2010 (and 30% of TOP4* Customers)
 Within 2015, recruitment will remain key to aliment Customer
Stock and ensure business with more than 60% of New
Customers expected every year…
 …but Customer repurchase rate has increased during the last 3
years and is a key opportunity to leverage the top-line and to
optimize occupancy rate
* 4% of the richest Households of the country
31
Opportunity #1 - Club Med Brand, a unique history in
North America and key points of differentiation vs.
competitors
2
Unique World Class Sport
Premium offer
30 years of Club Med
“signature” in North America
1
An iconic Brand in North
America for 30 years
3
Sandpiper Bay (Florida), the
only All Inclusive Family
Resort in North America
32
Opportunity #2 - The new world of travel marketing &
distribution, a key axis to develop our Share of Voice
Around 100MM
searches/month
40M Visitors/month
More than 600M of
Members
10.6M Visitors/Month
9M Visitors/Day
15M Visitors/Day
19M Visitors/Month
10M Visitors/month
The “Digital revolution” (OTA role, Social Network development)
represents a strong opportunity to maximize our visibility
33
Opportunity #3 - Canada, a market with high potential for
Club Med in Quebec
Club Med potential in
Quebec
Brand
Awareness
Preferred Brand
for vacations
Current
Penetration
85%
45%
9%
34%
15%
10%
21%
1%
8%
11%
4%
12%
9%
1%
5%
Source: Ad hoc Research, 2011 Brand Awareness study in the Province of Quebec
34
Opportunity #4 - Our Customer Database, an asset to
exploit to maximize BV and Ambassadorship
1
Our 100K North American Customers
are more loyal…
2
…on who we already have a great
understanding thanks to our unique
Customer Database…
+ 2 pts of increase

in repeat purchase rate
between 2008 and 2011
3
…and we could benefit from a direct
contact with the largest part of our
Customers to increase our Customer
Knowledge…
More than 50% of
direct distribution to
personalize our relationship at each
contact point with Customers
4
…including a new Social dimension
thanks to the digital revolution
Already 120 000
Facebook Fans in less than 6
months
35
Opportunity #5 - A new Premium Pricing Strategy to
sustain growth by the Top Line
Create
Saturation…
…Earlier in the
season…
…in a clear
communication
for the
Customers…
…in an
international
approach…
•
Ascending
price curve
implementation
(Pricing Premium
virtuous circle)
•
•
Leverage a
readable
Promotion
Strategy based
on early booking
reinforcement
•
New Pricing
graphic identity
Consistent Price
harmonization
between North
American
Customers
expectations and
European
demand
…to develop
Business
Volume
•
A fair,
transparent and
understandable
Price &
Promotion
strategy
36
Conclusion
Sandpiper Bay – Florida
October 21, 2011
And today we celebrate Sandpiper Bay renovation
38
Sandpiper renovation in 8 figures
$28.9M of investment…
A renovation in
2 phases
(Phase 1 from Sept. to Dec. 2010 and Phase 2 from Sept. to Dec 2011)
+336 beds with the same number of rooms
+$4.7M of GOP in 2011 vs 2010 (before renovation)
+6.4K Customers in 2011 vs 2010 (including 90% of New Customers)
21 Tennis courts in the Village
1 Golf on-site and 15 others ones at less than 20 mns
39
Club Med Sandpiper Bay, first flagship of the “premium
Sport” category
The best of a 4 Trident Club Med Family
Village…
The only family all-inclusive destination
in the USA, located in the Sunshine State
340 rooms, including Family and
Couple Deluxe rooms
Children’s programs available for ages
4 months - 17 years
2 gourmet dining options
An endless array of sports and activities
3 swimming pools and a splash park for
children
…with a point of difference:
Sport Academies
World Class infrastructures
• 21 Tennis Courts (clays and hard
court)
• 16 Golf courses 20 min with
concierge
• Fitness Center and L’Occitane
Spa
Multicultural World Class Coaches
specialized in kids and juniors
Program personalized for everyone
• Kids to Seniors
• Novice to Elite
A new Spa featuring the latest
treatments designed to renew the senses
40
Last figure but not the least…
100% of those tennis players were coached by our Pro in the past
41