Club Med eyes a return to its ‘pioneering spirit’

LATTE chats exclusively with Rachael Harding, CEO ESAP

Club Med Seychelles

Club Med’s strategy to pursue the premium market with an elevated all-inclusive holiday concept is advancing growth from the Australian and New Zealand market, says Rachael Harding, Regional CEO at Club Med.

“We worked a lot on our efficiency model through COVID, but we’ve been transforming to this upscale strategy for the past 20 years, and it’s just being realised,” Harding told LATTE while in Sydney last week.

The company had a supercharged 2023 in which Club Med recorded close to 2 billion Euro in top line business, significantly above pre-COVID levels, as profitability for the company skyrocketed more than 70%.

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Club Med has evolved from the former ‘Trident’ grading of its properties in favour of high-end ‘Premium’ and ‘Exclusive Collection’ as part of the brand’s upscaling. The Exclusive Collection are known for being set in beautiful locations with elevated service and personalisation, butler service and are operated either as a standalone resort or as a ‘resort within a resort’.

Launched in 2007, the Exclusive Collection currently accounts for 12% of Club Med’s capacity. Harding is transparent about the product, saying: “It’s luxury without the bling.”

“It’s not fluffy pillows and gold taps. It’s about space, time and experience.”

“Don’t go there expecting a Four Seasons or a St. Regis, that’s not we’re about. You’re going to have beautifully appointed resort accommodation with incredible food, and amazing experiences.” 

Rachael Harding, CEO East, South Asia & Pacific, Club Med

Well known in the local industry after 16+ years with The Travel Corporation holding senior roles with Contiki and Trafalgar, Harding has been at Club Med since 2018 when she was recruited as General Manager – Pacific. She then took on the leadership role as CEO within ESAP three years ago. At that time the initial plan was for Harding to be based out of Shanghai to oversee the entire zone. When it became clear China’s reboot post-pandemic was going to take longer than other regions, Harding instead moved to Singapore as CEO East, South Asia & Pacific (ESAP), where she has been based for two years.

It’s been 12 years since Club Med closed the doors to Lindeman Island on Queensland’s Great Barrier Reef. In 2018, when just new to the brand, Harding’s predecessor flagged the brand’s potential return to Australian shores when Xavier Desaulles told LATTE that the company was eyeing a return Down Under.

While nothing has come to fruition, Harding says the vision still remains but options are limited. She assured LATTE her visit last week wasn’t to sign a new property, but she restated that Club Med is “always on the lookout.” Club Med’s criteria for Australia is the potential property “must be coastal, on a 16-hectare site and located within two hours of an international airport.”

The Finolhu Villas, Maldives - Club Med Exclusive Collection

“I would love something like a Kingscliff [in Far North NSW], or somewhere coastal serviced by Brisbane or Gold Coast Airport – on that stretch of land, but there’s absolutely nothing there. It’s not a matter of not wanting anything but the priority is continuing to go into some pioneering destinations and continuing to invest in renovations that are still needed in this region.”

While discussing Club Med’s local audience, Harding admits “it took a long time for us to reinvent the brand here because of Lindeman.”

“There’s a lot of stigma attached to that resort and it being positioned as a 3-T [3-Trident] resort. There’s been a lot of hard work achieved for our brand.”

“We closed 85 resorts in the last 20 years and we’ve opened 50 and renovated the majority of the rest, and if not, work is slated.”

File photo: Club Med Lindeman Island | Source: Courier Mail

“There’s no more 3-T which was what your Lindeman and Bora Bora. As a consequence of this upscale motion, anything that couldn’t be renewed or renovated to where it needed to be, were part of the closure, and Lindeman was a victim of that. [Lindeman had] very high operating cost and was very hard to maintain, which is why its been difficult to find another property back here in Australia. I imagine we will still have the same kind of concerns now.”

“Consequently, every new resort that we’ve opened has been a Premium resort or Exclusive Collection, so we’re really trying to upscale our strategy in terms of premium clientele which has made us more profitable, so that’s really just a nod to the fact that the business has been changing for a long time, and occurred over the rebound time resulting in some really good results at the end of last year.”

“We have challenges like everybody but overall the business is doing very, very well. I feel like we came back quicker compared to a lot of other businesses in the hospitality industry in terms of getting back to, or over, pre-COVID levels.”

Where next for Club Med?

Harding says there’s a lot coming up in region for the brand which is a throwback to one of Club Med’s core values being its “pioneering spirit”.

“It sounds funny now because we’re in Nusa Dua and Phuket” – both very popular mainstream holiday destinations. “But no one was there when we opened. That’s why we have 16 acres of land in both. They built the road for us in Nusa Dua.”

“We feel like we need to get back to our roots of this pioneering destination.”

”We have quite a lot in the pipeline which I think are quite unusual. One is Musandam in Oman, about 90 minutes from Dubai. Next year we’re opening in Borneo, almost halfway between Brunei and Kota Kinabalu.

“We’ve signed an agreement with a development company in Indonesia. We’re looking at Manado which is incredible for diving. We are far down the line with that project.”

Manado, North Sulawesi, Indonesia | Image credit: Pexels

“And we’re always looking in this region. In fact i just entertained the Prime Minister of French Polynesia who is desperate to have a premium family resort because everything is honeymoon centric in Tahiti now.”

She adds that something in Fiji “would be awesome” and returning to Noumea in New Caledonia – where Harding first experienced Club Med on a family holiday as a child – “would be another great option.”

Harding says the Australian market is now back to “better than pre-COVID levels” and that Singapore is also thriving, while some other markets are “still on their way up.”

The Pacific region (Australia and New Zealand) is about 9% above pre-pandemic levels in term of top line business volumes at the moment. For this year, sales are up 36% on 2023 but there has been extra capacity introduced since last year’s.

Club Med Bintan Island, Indonesia

Since being at Club Med, Harding says the Australian customer for Club Med is “definitely a higher basket than when I began.”

“We still have the same core business in Australia – Bali, Phuket and Maldives. And it’s a different ticket price to a ski holiday but we definitely have a higher average basket spend.”

“We’re also seeing out of COVID that people are staying a little but longer. The average length of stay has risen by half a day. For Australians it’s quiet long anyway and its increased from 6.5 days to around 7 days. So staying longer, spending a little but more.”

Harding also noted Club Med is seeing “much more inter-generational travel to the point where we have targeted campaigns around that segment. We have experiences that are available that we’re tagging generational families now to make sure they are looked after when they are in resort, such as tables being put aside for them, activities dedicated to them, transfers all together.

“There is so much inter-generational travel now,” Harding said, noting that 75% of business is family oriented.

“Grandparents, parents, grandkids, even grandparents and grandkids. Certainly we’re seeing the kind of matriarchs and patriarchs paying for a lot more and wanting these experiences with their families now at a higher end and high cost. It’s a really interesting shift, and I’m seeing that a bit out of Australia too.”

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