Club Med has ceased operations of its first beach resort in China, Club Med Dong’ao Island since June 1, 2017.
Set on an island neighbouring Hong Kong and Macau, the property owned by China’s GREE Group had originally opened under the Club Med brand – with the 5T (Tridents) luxury section launched in 2014 followed by the 4T premium section in June 2015.
Sebastien Portes, general manager Hong Kong & Macau at Club Med, told TTG Asia that both Club Med and the owner had agreed on the outcome after “friendly negotiations”, citing strategy and business adjustments from both parties as factors.
“Club Med re-evaluates its portfolio every year (and) we are not at the level expected,” he added.“Unexpected extra costs and access difficulties to the resort by ferries made it impossible for Club Med to manage this resort in (accordance) with its quality standards.”
Local partners and agents were informed of Club Med’s decision prior to the closure. Guests who had bookings were compensated and/or offered stay in other Club Med resorts.
The hotel’s ‘Gentil Organisateurs’ (ambassadors and hospitality staff) were relocated to other Club Med resorts, and local staff remained in Dong’ao as per GREE’s new management direction.
While all Club Med intellectual property were removed and Club Med’s unique business model discontinued, resort hardware has remained.
Contrary to Club Med’s account on the mutual agreement to separate, industry sources claimed otherwise.
Shenzhen-based Shangpin Tours (Southern Region), general manager, Jason Liang, said: “It’s typical to see owners end management contract and take the operation back after experiencing stable and lucrative growth. Frankly, weekend getaways have been so popular in China and demand is always there for holiday resorts.”
Hong Kong-based Lotus Tours’ general manager and chief distribution officer, Keller Mak, observed similarly that the Club Med product had done well in the mainland market, but pointed out that it was not the case in Hong Kong.
She, too, was unsurprised by the premature termination of Club Med’s management contract. “If they don’t feel ready to do it on their own, they will ask for professional management. However, once they have learnt the ropes, they’d do it by themselves,” Mak said, adding that Club Med’s international Gentil Organisateur experience was what set the resort apart from the others.
Mak said she would wait and see what the Dong’ao premise can offer before putting the product back on the agency shelves.
Guangzhou-based GZL International Conference and Exhibition Services, project director, Landy Leung, would still recommend the product to clients – but noted that her clients trust international hotel brands.
Portes reiterated the closure of Club Med Dong’ao island does not affect growth plans in China and Asia. In China, it will open three new resorts under Club Med Joyview in January 2018 – namely in Golden Beach, Qinghuangdao; Great Wall; and Anji (near Hangzhou).