Club Med to invest $530 million on portfolio by end of 2008

By December 2008, Club Med will introduce its fully updated portfolio of properties, following a $530 million investment in fiscal years 2006 and 2007 that included the permanent closing of five resorts and the total upgrade and renovation of seven others, targeted at the upscale family market.

The seven upgraded resorts are the Club Med Cancun Yucatan, Cancun, Mexico; the Club Med La Caravelle, St. Anne, Guadeloupe; the Club Med Aime La Plagne, Macot La Plagne, France; the Club Med Opio in Provence, France; and soon, the Club Med Albion, Port Louis, Mauritius; the Club Med Ixtapa Pacific, Zihuatanejo, Mexico; and the Club Med Buzios, Brazil.

Club Med's new business models adapt resort development and management structures to each property and region and include the use of management contracts, long-term leasing and mixed-use developments, according to company officials.

The French hotel firm currently operates six resorts via management contracts in Egypt, France, Turkey and Israel. Local labor is used for the resort's daily operations, while Club Med staff fill leisure and entertainment-related positions.

Meanwhile, Club Med Buzios in Brazil will be the hotel firm's first condominium resort development with 300 units sold to individual buyers.

To further improve profitability and capacity without additional capital outlays, Club Med will develop residential villas adjacent to select resorts. Club Med Albion will introduce the first villas, while several other villa sites, specifically at its resorts in Guadeloupe and the Dominican Republic, are being looked at.

New developments are under study in Costa Rica, Belize, the Dominican Republic (there is one Club Med resort at present) and Mexico (two resorts currently); the firm also has sites in Nicaragua, Guatemala and Honduras under consideration.

To contact the reporter who wrote this article, send e-mail to Gay Nagle Myers at [email protected].

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