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- Fosun Tourism Announces 2021 Interim Results Global Travel Restarted and Continues to Improve Financial Position Remains Healthy Long Term Growth with a Bright Future
Fosun Tourism Announces 2021 Interim Results Global Travel Restarted and Continues to Improve Financial Position Remains Healthy Long Term Growth with a Bright Future
In the first half of 2021, under the negative impact of the COVID-19 pandemic outbreak, the Business Volume of the Group’s tourism operations decreased to RMB2,433.8 million, representing a year-on-year decrease of 41.9%. The adjusted EBITDA decreased to RMB-565.0 million, and the loss attributable to equity holders was RMB2,004.8 million.
The Group’s resort and destination operation businesses performed outstandingly in China. Business Volume of Club Med resorts in China grew by 171.9% year-on-year in the first half of 2021.
In the first half of 2021, Business Volume of Atlantis Sanya recorded a year-on-year increase of 152.1%, and EBITDA margin was 49.2%.
In July 2021, Club Med’s capacity were restored to 73.2% of that of the same period in 2019, and the average occupancy rate of worldwide resorts reached 67.1% during the period. As of 31 July 2021, the cumulative bookings of the second half of 2021 increased by 97.8% compared with the same period in 2020 and recovered to 83.9% of that of the same period in 2019.
The Group’s cash flow remained strong. During the reporting period, the Group's cash flow from operating activities turned positive and increased to RMB1,311.0 million. As of 30 June 2021, cash and bank balances were approximately RMB5,200.0 million, whilst unused bank facilities were approximately RMB4,4 million.
On 19 August 2021, Hong Kong Fosun Tourism Group (“Fosun Tourism” or the “Group”, Hong Kong Stock Exchange Stock Code: 1992), the world’s leading leisure-focused integrated tourism group, was pleased to announce its interim results for the six months ended 30 June 2021 (“the first half of 2021” or “the reporting period”).
Facing the continued spread of Novel Coronavirus (COVID-19) (the “Pandemic”) in the first half of 2021, countries took stringent travel restriction measures, which posed a major negative impact on the resort and the tourism operations of the Group. During the reporting period, the Business Volume of the Group’s tourism operation, at a constant exchange rate, decreased by 41.9% year-on-year to RMB2,433.8 million. Revenue of the Group decreased to RMB2,781.5 million; adjusted EBITDA decreased to RMB-565.0 million; and loss attributable to equity holders was RMB2,004.8 million. Through highly efficient cash flow management, the Group maintained a healthy financial position. The Group's cash flow from operating activities turned positive to RMB1,311.0 million during the reporting period. As of 30 June 2021, cash and bank balances of the Group were approximately RMB5,200.0 million, unused bank facilities approximately RMB4,367.4 million, and bank loans due within one year approximately RMB2,282.2 million.
Global businesses have significantly rebounded since May, and Chinese businesses led the recovery of the tourism industry
The spread of the Pandemic in EMEA (Europe, Middle East, and Africa) led to the temporary closure of most resorts in the Alps from January to March, and outbound travel from major customer sourcing markets was suspended. As a result, the Business Volume of Club Med in the first half of 2021 decreased by approximately 64.2% year-on-year. Since late-May 2021, as the Pandemic in EMEA and Americas have gradually been under control, countries and regions have begun enforcing “vaccine passport” and easing lockdown measures. For May and June 2021, the cumulative bookings from EMEA and Americas for six months ended 31 December 2021 (the second half of the year) have exceeded 39% and 69% of that of the same period of 2019, respectively. The Group is well-positioned for a business rebound in the second half of 2021 and has placed considerable efforts in resuming the operations of resorts. In July 2021, 41 resorts have resumed operations with overall capacity increasing by approximately 104.3% as compared to that of 31 July 2020 and recovering to 73.2% of that of 31 July 2019. By 31 July 2021, the cumulative bookings for the second half of 2021, expressed in Business Volume and at a constant rate, increased by approximately 97.8% as compared with that for the second half of 2020 recorded as of 31 July 2020, and resumed to 83.9% of the bookings for the second half of 2019 recorded as of 31 July 2019.
In the first half of 2021, with the Pandemic outbreak well controlled in China and the increasing travel demand, by leveraging the Group’s outstanding branding and product leadership, the business of Club Med resorts in China recovered strongly, with Business Volume increased by 171.9% compared with the same period in 2020. According to the estimates by the China Tourism Academy, China’s tourism revenue resumed to 57%, 77%, and 75% respectively during Qingming Festival holiday (3 to 5 April 2021), Labor Day Holiday (1 to 5 May 2021) and Dragon Boat Festival holiday (12 to 14 June 2021) in 2021, as compared to the same periods of 2019 (before the outbreak of Pandemic). Club Med resort in China recorded significant growth in the above three public holidays, which widely outperformed the industry-wide recovery. The Business Volume increased 63%, 91%, 19% during Qingming Festival holiday, Labor Day Holiday and Dragon Boat Festival holiday in 2021, compared to the same period in 2019, before the outbreak of the Pandemic, respectively.
Since the implementation of a new offshore duty-free policy on 1 July 2020, Hainan has become a new travel hotspot. In the first half of 2021, Atlantis Sanya’s operation continued to show a strong growth momentum. Its Business Volume increased by 152.1% compared with the same period of last year, reaching RMB835.2 million, and adjusted EBITDA of reached RMB410.9 million, an increase of 309.1% compared with the same period of last year, demonstrating its operating capability on a rapid expansion of market share in the post-Pandemic period. Meanwhile, the number of visitors to Atlantis Sanya in the first half of the year increased to approximately 2.6 million from 1.4 million of the same period in 2020, among which 1.2 million and 0.6 million visited Waterpark and Aquariums respectively.
In the first half of 2021, Atlantis Sanya actively promoted upscale products and launched market collaborative projects. It set Guinness World Record successfully for the “Largest Underwater Mermaid Show”. It also actively upgraded the tourism retail in the resort, promoted the layout and development of new retail areas, and introduced brands like Kaola Global and Pop Mart.
The Pandemic never alters the pace of development, and strong resorts layout improves the global presence
The Pandemic has not stopped the development of the Group. In early 2021, the Group laid out a plan to open 16 new villages by the end of 2023, in which 8 of them are in China. The plan was on track in the first half of 2021. Club Med has opened a new resort in Seychelles in the first half of 2021. The Group also plans to renovate 12 resorts by mid-2024 based on an upscale strategy. Club Med Lijiang resort in Lijiang FOLIDAY Town, Quebec Charlevoix resort, and Changbaishan resort will open in the upcoming autumn or winter.
Casa Cook brand series, the Group's asset-light boutique hotel brands, have signed 14 franchise agreements in EMEA and 4 hotel management agreements in China as of 30 June 2021. The Group plans to operate no less than 30 hotels worldwide by the end of 2023.
Mr. Henri Giscard d’Estaing, the Vice Chairman and Deputy CEO of Fosun Tourism Group, said, “The worldwide sanitary crisis continued to have a serious impact on Club Med’s results in the first half of 2021. To fight this crisis, our Club Med team continues to work hard and take strong actions to reduce costs as well as maintain a healthy cash flow. With the support of our landlord partners around the world, we also continue to renovate our existing resorts and prepare to open new destinations to drive our future profitable growth. Against the backdrop of the Pandemic, people’s desire for holidays with freedom and safety is growing every day. Club Med’s offers match the expectation of tourists, especially that of family tourists. I am confident that we are ready to the rebound, and that with our global value strategy, direct digitalized distribution and ambitious development plan, we will deliver a profitable growth within the FOLIDAY ecosystem.”
Building FOLIDAY upscale ecosystem, the construction and pre-sale of the FOLIDAY Town progress steadily
Two FOLIDAY Town projects both performed as planned in the first half of 2021. Club Med Lijiang Resort in Lijiang FOLIDAY Town has entered the preparatory stage of opening and is expected to commence operation in the upcoming autumn. Construction of the saleable vacation inns and residence project of FOLIDAY Town Lijiang began in the first half of 2020. The project has been completed in stages since late 2020 and will be fully completed from 2022 to the end of 2023. The construction project of Taicang FOLIDAY Town is expected to be completed in stages since 2021 and will be fully completed from 2024 to the end of 2025. As of 31 July 2021, a sales permit for GFA of approximately 143,000 square meters was obtained by Taicang FOLIDAY Town, of which 823 sets of saleable units have been completed. The construction of the indoor ski domain “Alpes Snow World” has started in January 2021, while “Alpes Time Town” and Club Med Joyview Taicang Resort are under full-scale construction in June 2021.
The century-old brand is under rapid development through digital transformation
In July 2020, the Group officially relaunched the "Thomas Cook Lifestyle Platform" in China as a one-stop vacation lifestyle platform for global families. Leveraging FOLIDAY's global advantageous resources, the brand-new Thomas Cook Lifestyle Platform achieved precision marketing aimed at urban middle-class families and young clientele, with a focus on leisure and tourism services. 2021 marks the 180th anniversary of Thomas Cook, one of the most well-known tourism brands in the world. The restart of its operation will speed up the development again. As of 30 June 2021, the cumulative number of downloads of "Thomas Cook Lifestyle Platform" was approximately 1.5 million. Since 16 September 2020, the brand-new Thomas Cook Online Travel Agency was put into trial operation in the UK. In the first half of 2021, Thomas Cook China and Thomas Cook UK achieved a total Business Volume of nearly RMB274.8 million.
Consolidate the leadership in ski ecosystem
The Group operates 15 mountain (ski) resorts in Europe and four in Asia Pacific, and is committed to creating a complete and diversified ski ecosystem. By the end of 2023, the Group has six to eight mountain resorts in the pipeline, among which there are two new mountain resorts in China, including Changbaishan Resort and Chongli Thai Woo Resort. By then, the Group is expected to operate six to eight mountain resorts in and around China.
The Group’s tourism destination brand-“FOLIDAY Town” (復遊城) is becoming a leading brand of the integrated sports-travel complex. “Alpes Snow World” in Taicang FOLIDAY Town is a large-scale indoor ski resort in East China, and is jointly managed by the Group and Compagnie des Alpes (CDA), a French ski domain operator based in French who was also one of the contractors of Winter Olympics. With five ski slopes, seven "magic carpets" serving as conveyors, the “Alpes Snow World” offers over 20 ski and leisure activities. In terms of ski practice and training, there is an all-ages ski school under Club Med, offering visitors professional-level ski instruction which is from the European system.
The Group's indoor ski simulators brand "Foryou Ski" (復遊雪) is dedicated to providing quality solutions for urban skiers. It has opened seven stores.
Mr. Qian Jiannong, Chairman and CEO of Fosun Tourism Group, said, "I always believe that we are the one deciding our own destiny and future. Hence, we have never stopped gearing up ourselves and seizing the opportunity to explore a better future and potential development even amid the challenges to the tourism industry posed by the Pandemic. With a healthy financial position during the first half of the year, our businesses in China secured a rapid growth.
We are well assured that we are fully prepared for the global business recovery in the second half of the year. From the rapid recovery of our overseas businesses in July, we see a silver lining towards the recovery of the Company's global business in the second half of the year. During the crisis, the Company has never stopped the planning for a long-term growth. Therefore, we have been in full commitment in promoting the development of the resort and tourism destination businesses, as well as building the Group's digital and vacation content ecosystem. As a result, we are confident that as countries ease travel restrictions and release purchasing power for travel and vacation, the Company’s global businesses will be back on the growth track by riding on Fosun Tourism’s global influential products, brand power and globalized talent system.”