(Bloomberg) -- Fosun International Ltd. is “open to talks for some minority strategic partnerships” in its tourism business, including French luxury resort chain Club Med SAS, as the Chinese conglomerate continues its efforts to lower its debt burden.
Fosun aims to still have a controlling power in its core business, Andrew Xu Bingbin, CEO of Club Med China and Co-President of Fosun Tourism Group, said in an interview with Bloomberg TV on Wednesday. Its tourism business, including Club Med, is one of the group’s four core operations, he said.
Singapore’s CapitaLand Investment Ltd. is seeking to acquire a 20% to 30% stake in Club Med, Bloomberg reported last week, citing people with knowledge of the matter. Xu declined to offer any details or specific names regarding the reported negotiations.
Backed by billionaire Guo Guangchang, Fosun owns Club Med through its listed leisure arm, Fosun Tourism Group.
Club Med’s China business saw 33% growth year-on-year in the first half, according to Xu. The brand “is almost on track” for its plan to add 17 properties globally by the end of this year, with about half of them in China, he said. It’s opened five resorts in the country since the second half of 2021 and will unveil one more next year in the eastern city of Hangzhou, he added.
Still, Xu cautioned, pricing power was weakening, with consumers tending to book last minute and seek better value.
“Simply raising prices doesn’t work any more,” he said.
The hospitality and tourism sector has been a bright spot as the Chinese economy slows in the wake of Covid-19. But it’s also feeling the pinch as Chinese consumers increasingly bargain-hunt and pull back on spending, including when they travel.
The industry is “comparatively resilient,” Xu said.
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