Club Mediterranee SA

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Club Mediterranee SA

also known as: club med founded: 1950

Contact Information:

headquarters: 11 rue de cambrai
paris 75019 france phone: +33-1-53-35-35-53 fax: +33-1-53-35-36-16 toll free: (800)club med url: http://www.clubmed.com

OVERVIEW

Club Mediterranee SA, commonly known as Club Med, operates around 130 vacation villages in some 50 countries on 6 continents. These villages offer guests a unique, all-inclusive (one-price food-and-fun package) vacation experience. In addition, the company operates two luxury sailing ships, Club Med 1, which was sold in 1997 and Club Med 2. Club Med 1 sails on the Caribbean and Mediterranean, while Club Med 2 cruises the South Pacific and French Polynesia, but will be taking on Club Med 1's itinerary in 1998. Both are some 600 feet in length and have 8 decks, a 400-person capacity, spacious windows, two restaurants, four cocktail lounges, piano bars, nightclubs, and 24-hour medical care.

COMPANY FINANCES

In 1998 Club Med's total revenue was $1.05 million, down from 1997's $1.42 million, which was also down from 1996's total revenue of $1.56 million. 1994 saw revenue at $1.70 million, and in 1995 total revenue reached a five-year high of $1.73 million.

HISTORY

Club Med was founded in 1950 by Gerard Blitz, an Olympic water polo champion from Belgium, who later partnered with Gilbert Trigano. Blitz offered the concept of a vacation escape that emphasized sports and friendships to Europeans who were tired of post-war life. Trigano's family supplied the tents used as guest quarters at the first Club Med village on the shores of Alcudia, Majorca, Spain. The guests lived communally, helping to cook meals and wash dishes.

The idea behind the club, according to the company, was "to create an environment completely different from daily life, where guests could partake in a full range of recreation options without worrying about money. Out of this concept grew the all-inclusive vacation package where vacationers pay one price for transportation, lodging, three meals per day, wine and beer with lunch and dinner, most sports and leisure activities with lessons, and evening entertainment." Guests are given the freedom to choose the activities in which they wish to participate, or they can choose not to participate in any organized activities.

STRATEGY

Club Med's "secret," according to the company, is its "ability to stay ahead of the changing desires and needs of the vacationing public, while maintaining the spirit of the village lifestyle." The company has added single rooms and intimate restaurant settings, as well as televisions and telephones "to make rooms at the Club's facilities more comfortable and individualized." However, one industry publication noted that this was anathema, "quite a revolution for a hotel group that began its existence as a haven of peace for urban dwellers seeking to escape to greener pastures."

Club Med hosts 1.3 million guests annually and anticipates that number to reach 2 million by the year 2000. In part, the company attributes this to the shift from being seen as a vacation destination for single people to attracting couples, families, and senior citizens as well. Of the more than 1.5 million guests at Club Med in the mid-1990s, more than 250,000 of them were children; about 50 percent of the guests were married couples.

INFLUENCES

In order to combat competition from the large hotel chains opening copycat facilities and making takeover gestures, Club Med began a massive investment program in the late 1990s. The company intended to invest $50 to $80 million annually for several years to renovate its properties at a rate of 4 to 5 updates per year. The company plans to complete 15 such renovations by the year 2000, in addition to the construction of some 20 new villages. Club Med hires architects and designers for these renovations and additions, including Christian Liaigre, a Parisian designer who was responsible for redesigning Club Med villages at Gregolimano and Kos in Greece. Club Med plans to have some 117 villages around the world by the end of the century.

CURRENT TRENDS

Club Med is a customer-driven company that listens carefully to what guests want. In fact, the idea for Baby, Mini, and Teen Clubs came from customer requests. Originally the Club catered primarily to singles and couples. As these people aged and had children, they wanted to vacation as a family. Thus, the first Mini Club opened in 1967 and the first Baby Club opened in 1971. The Club Med in Sandpiper, Florida, was named the "Best of '97" family resort in an America Online poll. Yet each village has its own unique style, some providing conditions more appropriate for a family environment, while others are geared to the singles lifestyle.

FAST FACTS: About Club Mediterranee SA

Ownership: Club Mediterranee SA is publicly owned and traded OTC (over-the-counter).

Ticker symbol: CLMDY

Officers: Philippe Bourguignon, Chmn. & Pres., 49; Yves Martin, Director General Marketing Worldwide; Henri Giscard d'Estaing, Assistant Director General, Finance, Development, & International Relations; Claude Ravilly, SEVP Finance & Informatique

Employees: 20,000 (1996)

Principal Subsidiary Companies: Club Med's primary subsidiaries include Club Aquarius, Club Med, Inc., and Club Med Sales, Inc.

Chief Competitors: Club Med's major competitors include: Accor SA, a worldwide hospitality company, hotel operator, travel agency, and auto rental company and Carnival Corporation, a top overnight cruise, hotel, and tour operator.

In 1994 Club Med launched its own Internet site, becoming one of the first travel organizations to do so. The site was completely redesigned and re-launched after a year and a half of experimentation, and new features are continually added, including graphics, photography, audio, weather reports, weekly updates, and promotions. By partnering with Reality Studio and Live Picture, Club Med's web site offers a virtual reality tour of its vacation spots.

CORPORATE CITIZENSHIP

Club Med states that its top priority in developing and operating its destinations is to respect local ecological environments and to fully integrate the architecture of any new villages into existing surroundings.

The company also began offering "environmentally conscious" sailing packages aboard luxury ships in the Caribbean, Polynesia, and Mediterranean in response to the success of the cruise industry. Launched in 1990, Club Med 1 was touted as the world's largest computer-operated sailing ship. According to the company, "Sail power helps conserve the dwindling fossil fuel supply. When she must run her engines, Club Med 1 utilizes a light, high-grade oil, free of most impurities. Solid wastes are incinerated; cans/glass compacted, stored and offloaded for recycling at the end of each voyage."

In the mid-1990s, French authorities reportedly offered Club Med officials the option of locating one of its new villages on Muruoa Atoll, a French nuclear test site that was closed in 1996. According to an article in Hotel and Motel Management, a spokesman for the French Foreign Ministry said the location on the blast site would be "an excellent means of demonstrating that French tests had never in any way polluted the area." "If the offer is serious," said Serge Trigano, then chairman of Club Med, "it'll be a pleasure to go and visit the site and see what can be done."

GLOBAL PRESENCE

Club Med operates all-inclusive vacation resorts and hotels around the world and is continually looking for new pieces of paradise to develop. This expansion meets the growing needs of a diverse global clientele.

In the late 1990s Club Med built its one-hundred and fifth village, located on Cuba's Varadero peninsula 90 miles east of Havana. Construction was financed by the Cuban government. The company has also made significant progress towards expansion in Asia, such as the first Club Med resort in China—located on Lake Yang Zhong Hai in the city of Dunming—as well as developing locations in Singapore and Indonesia. In 1996 the company announced that it intended to increase its presence in Spain and Italy and form a management group for its southern European operations.

CHRONOLOGY: Key Dates for Club Mediterranee SA

1950:: Gerard Blitz brings the 2,300 charter members of the club together in a small village in Spain to escape from the daily life of postwar Europe
1957:: Club Mediterranee is incorporated
1961:: The Rothschild Group becomes the largest shareholder and begins financing further expansion
1968:: Club Med signs a preferential agreement with American Express to attract U.S. clients
1980:: Copper Mountain, Colorado, the first full-scale Club Med village in the United States, opens
1984:: Club Med, Inc. opens in New York to take over operations in North and Central America, Asia, and the Pacific and Indian Oceans
1987:: The first full-scale village opens in Japan
1990:: Club Med extends its agreement with American Express; the world's largest sailing ship, Club Med 1 is launched
1997:: Club Med 1 is sold

EMPLOYMENT

Hosts and hostesses are called GOs, which stands for Gentils Organisateurs, or gracious organizers. They are recruited from more than 20 countries. Job requirements are a "sense of organization and a sense of humor" along with "administrative skills and a talent for managing sports, for creating the space people need to relax, have fun and enjoy themselves." An average 600-bed village is staffed with 90 to 100 of these employees, whose average age is 28. They have the opportunity to move to a new village every 6 to 12 months. GOs participate in the daily life of the village when not working as sports instructors, entertainers, chefs, or administrators. Unlike the usual uniform-clad hotel employee, GOs do not wear uniforms, and they do not accept tips.

SOURCES OF INFORMATION

Bibliography

"beauty and 'beast' of kunming." south china morning post, 31 march 1998.

club med home page, 5 april 1998. available at http://www.clubmed.com.

"club med moves into cuba." euromarketing, 30 january 1996.

club med trident. new york: club med, inc., 1996.

VACATIONS FOR JOCKS

Into sports and adventure? Gotta little extra money to spend? Then a Club Med vacation is the thing for you. Club Med is Sports Central. At a Club Med village, you can work out before breakfast, play a set of tennis afterwards, waterski and windsurf until lunch, and snorkel and sail until dinner. Or maybe you prefer aerobics followed by a round of golf, or archery followed by a rugged mountain-bike ride. Or perhaps you'd rather do a little scuba diving and then some horseback riding. Club Med has got it all. The possibilities are endless. Activities are available all day long, from dawn until dusk. By land, air, or sea, in summer, fall, winter, or spring, Club Med has got the activity for you.

Like to explore under the sea? Dive the exotic waters off Bora Bora in French Polynesia and discover exotic new worlds and sea life. Rather be on top of the water? Windsurf the waters surrounding the Greek isle of Kos or waterski the azure sea off of Kemer, Turkey. Always wanted to run away and join the circus? Visit the Club Med in Ixtapa, Mexico, and master the tightrope and trampoline, and sail through the air with the greatest of ease on the trapeze. Or just clown around if you want. Crave the excitement and thrills of the Great Outdoors? Visit the French Pyrenees and try your hand at canyoning, rappelling, rock climbing, rafting, and the challenging "Indiana Jones" course. Looking for something a little more relaxing? Ride horseback along the rolling hills near Sonora Bay, Mexico, or tee it up on Lindeman Island in Australia. More into cold weather sports? Shred the Rockies on a snowboard at a Club Med in Copper Mountain, Colorado, or do some serious schussing at the village in St. Moritz, Switzerland. And after a hard day of play, relax with an "anti-stress" massage and a hot water soak.

In addition to these adventurous activities, Club Med villages have your more mundane sports also: fishing, tennis, weight lifting, aerobics, in-line skating, squash, basketball, volleyball, softball, soccer, ping-pong, billiards, yoga, and more. And you don't have to worry about being inexperienced at an activity—Club Med caters to all levels of expertise and offers expert instruction to help you along. If some days you feel like doing nothing, you can do exactly that—just relax on the beach and catch some rays. But if nonstop action and adventure are what you mainly crave, a Club Med village is the place for you.

"club mediterranee sa." hoover's online, 6 july 1998. available at http://www.hovers.com.

"family travel network announces winners of 'best of '97' poll." pr newswire, 7 january 1998.

macdonald, john. "club med, not wanting to resort to its old image, broadens its appeal." seattle times, 27 october 1996.

michaud, paul. "competition sparks club med restructure." hotel & motel management, 3 july 1996.

"online travel industry experiences interactive revolution fueled by live picture reality studio." pr newswire, 23 march 1998.

sidron, jorge. "club med finds success sticking to key formula: fun, relaxation." travel weekly, 25 november 1996.