Club Med was arguably the pioneer in the premium all-inclusive holiday space, but it has also come to play a significant role in the MICE industry. It already has over 70 all-inclusive resort villages in a number of exotic locations around the world, and now it is looking at where its growth is going to come from. To this end, it was good to catch up with the Managing Director of the Southern Africa office, Olivier Hannaert, over a coffee in Johannesburg.
When I ask Hannaert how he would describe the Club Med offering, he doesn’t miss a beat.
“We are there to reinvent happiness and it’s important that we keep coming back to it,” he says. “At the end, it’s important not just to sell a property or a holiday, but it’s to ensure our clients experience happiness.”
No big surprise, considering Hannaert has been with Club Med for over 20 years and considers the group part of his DNA. He’s been managing director of the Southern Africa office for the past two years, giving him insight into the industry in this part of the world, and some of his observations are rather interesting.
“South Africa is a really digital country, with agility and a developed online space with good apps, but the travel industry is not at the level of other industries like the banking industry, for example,” he says. “The real challenge for the South African travel industry is to have a digital mindset. It’s maybe a bit of an ‘old school’ industry.”
So, that’s the travel industry as a whole, but what about the niche that Club Med occupies within that industry?
“The all-inclusive element is the core of our business, and we created the concept,” says Hannaert. “It’s one of our main strengths, and when we say ‘you don’t need your wallet’, we mean it, which is not necessarily the case with some of our competitors. Everything is included – drinks, activities, kids entertainment etc. For the South African market, taking into account the exchange rate, it’s very attractive, and you know exactly what you’re in for.”
Hannaert believes the same applies to the MICE industry, a segment he identified as an area of opportunity when he arrived in Johannesburg two years ago. The same principle applies, even if you’re dealing with groups of 400, 500.
“For corporates, it’s important for them to know exactly what they are going to pay at the end of their stay,” he says. “There are no surprises and the quality of the product is there.”
Club Med’s existing African presence is made up of resorts in Senegal, Tunisia and Morocco, with a new project in Benin in West Africa also currently in the works. According to Hannaert, North Africa was previously a big part of Club Med’s business, but that the events of the past few years and the instability in that region had changed the group’s mindset and forced it to look at the rest of Africa.
Club Med plans to open a new resort in the Seychelles next year and is refurbishing and extending its Senegal property, but the big, new development could be found further south. Hannaert confirms that Club Med is at an advanced stage of looking at a new resort in Durban, South Africa.
“It could be a beautiful destination for the European and Chinese markets, as well as the domestic market, including our attempts to grow our MICE business in South Africa,” says Hannaert. “We need to ensure the location is a fit for the resort and it will be a greenfield project, because no-one was able to provide us with the capacity we need, which is a resort open all year and with the potential for 400 beds. As soon as we’ve signed the agreement, there will be two years of work.”
Hannaert says the forecast is for 40% domestic and 60% international business, but that the viability of the project is largely dependent on South Africa’s socio-political issues.
“Next year’s election is important for this project and what we can expect in the next few years, along with political stability, the Rand etc,” he says. “All these factors are important and will impact on the proposed opening of this property.”
That aside, what does Hannaert believe Club Med needs to be in the South African market?
“We need to be the leader in the all-inclusive market, because there is a lot of ‘copy and paste’ out there,” he says. “I think the understanding, knowledge and brand awareness is there. We don’t need to reinvent the wheel, but rather focus on the basics, such as ensuring a seamless experience to customers booking with us.”