Annual report 2005
Annual report 2005
A French “société anonyme” (limited company) with a share capital of €77,432,020 Registered office: 11, rue de Cambrai 75957 Paris Cedex 19 – France Tel.: +33 1 53 35 35 53 - Fax: +33 1 53 35 36 16 – www.clubmed.com 572 185 684 RCS Paris – License: LI 075 95 0333 Financial guarantee APS – 15, avenue Carnot - F-75017 Paris RCP no. AA 992 497 GENERALI ASSURANCES IARD – 7, boulevard Haussmann - F-75456 Paris Cedex 9
Contents History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Profile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interview with Henri Giscard d’Estaing . . . . . . . Board of Directors . . . . . . . . . . . . . . . . . . Corporate governance . . . . . . . . . . . . . . . The year in figures . . . . . . . . . . . . . . . . . . Stock markets and shareholding . . . .
02 03 04 07 08 11 13
The new Club Med becomes a reality . . . . . . . . . . . . . .15
Group business activity in 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Sustainable development . . . . . . . . . . . . . . . . . . . . 37
16
The Villages . . . . . . . . . . . . . . . . . . . . . . . . . 28
A new organization to improve the way we address the challenges
2005 – brand renewal
...............
2006 – reconfiguring our Villages as a central plank of our upscale strategy . . . . . . . . . . . . . . . 18 2006 – a new refined, generous, à la carte product range . . . . . . . . . . . . . 20 Cap sur les talents (focusing on talent): adapting skills and culture . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Moving upscale stimulates direct and indirect distribution
....
24
Client flows
.........................
30
Village business activity by zone
....
32
Other Group business activities
....
34
...
38
Quality and safety: the building blocks for long-term trust . . . . . . . . . . 40 Developing talent
...................
Villages involved in local development
...............
Sharing values through information and dialogue
..........
43 50 54
Controlling environmental impact and raising client awareness . . . . . . . . 55
Management Discussion and Analysis . . . . . . . . . . Transition to IFRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006 financial reporting calendar . . . . . . . . . . . . .
60 70 78
Club Méditerranée Group Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 Consolidated Balance Sheets . . . . . . . . . . . . . . . . . . . Consolidated Statements of Operations . . . . . . . . Consolidated Statements of Cash Flows . . . . . . . . Notes to the Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . .
80
1 - Summary of Accounting Policies . . . . . . . . . . . . . . . . 2 - Significant Events of the Year . . . . . . . . . . . . . . . . . . . 3 - Notes to the Consolidated Balance Sheets . . . . . . 4 - Notes to the Consolidated Statements of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 - Notes to the Consolidated Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 - Commitments and Contingencies . . . . . . . . . . . . . . . 7 - Employees and Executive Compensation . . . . . . . . 8 - Fees Paid to the Auditors . . . . . . . . . . . . . . . . . . . . . . 9 - Financial Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . 10 - Claims and Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 11 - Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . 12 - Companies Consolidated at October 31, 2005 . . .
83 87 88
81 82 83
Club Méditerranée SA Financial Statements (Excerpts) . . . . . . . . 115 Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Statement of Operations . . . . . . . . . . . . . . . . . . . . . . . Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . Five-Year Financial Summary . . . . . . . . . . . . . . . . .
Other Statutory Information
.......
General information about Club Méditerranée . . . . . . . . . . . . . . . . . . . . . . General information about the Company’s capital . . . . . . . . . . . . . . . . . . . . . . . . . . The market for Club Méditerranée Shares . . . . Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . .
116 118 119 120
121 122 125 129 131 131
98
Additional Information . . . . . . . . . . . . . . . . . 143
101 103 104 105 105 106 106 107
Draft resolutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
Auditors’ Report on the Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . 111 Simplified Organization Chart at October 31, 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112 1
1950 Club Méditerranée is created by Gérard Blitz as a non-profit-making organization. First Village opens at Alcudia in the Balearic Islands. 1957 Club Méditerranée becomes a limited liability company. 1963 Gilbert Trigano becomes CEO. The company continues to grow, chiefly in the European market. 1966 The company is floated on the Paris Bourse. 1968 The first Village in the French West Indies opens at Les Boucaniers to tap the US market. 1973 First sales representation in Japan. 1979 New Villages added in Asia and South America. 1984 US and Asian activities brought together in Club Med Inc., and 27% of equity floated on the New York Stock Exchange. 1985 Opening of Faru Village in the Maldives and Phuket Village in Thailand. 1989 Opening of Opio Village, near Nice. 1990 Launch of Club Med 1, the world’s largest sailing ship. 1991 Acquisition of Club Aquarius. 1992 Launch of Club Med 2 and opening of Columbus Isle Village in The Bahamas. 1997 The company becomes a Limited Liability Company with Executive and Supervisory Boards. Philippe Bourguignon is appointed Chairman of the Board. 1999 Acquisition of Jet tours, France’s 4th largest tour operator. 2001 Acquisition of Gymnase Club, later to become Club Med Gym. 2002 Henri Giscard d’Estaing becomes Chairman of the Board. Twenty Villages close, following the terrorist attacks of September 11, 2001. 2003 Opening of Trancoso Village in Brazil and Palmyre-Atlantique Village in France. 2004 Accor becomes the majority shareholder in Club Méditerranée, holding 28.9% of share equity. Opening of the first “3 in 1” Village at Marrakech – the showcase of the new upscale, friendly and multicultural Club Med.
Becomes a Limited Liability Company governed and managed by a Board of Directors, chaired by Henri Giscard d’Estaing.
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Annual report 2005
2005 Opening of the Peisey-Vallandry Mountain Village in Savoie.
Complete reconstruction of Les Boucaniers Village in Martinique, one of the most legendary Villages in the history of Club Med.
Creator of the vacation club concept, Club Méditerranée is the world leader in all-inclusive vacations, with 80 Villages in 40 countries, and the cruise liner Club Med 2. With its products distributed in over 1,500 travel agencies through its direct and indirect distribution networks, Club Méditerranée also markets Jet tours, France’s leading tour operator, and Club Med Gym, the benchmark in urban fitness centers. In 2002, Club Méditerranée embarked on a major program of change to create a redesigned product range that would meet the expectations of clients looking for an exceptional vacation experience. In opening up the upmarket, friendly, multicultural segment of the market, Club Méditerranée applies the Club Med signature to products that set the highest standards in terms of comfort and service, and has reestablished itself as the benchmark for prestige vacations, whilst capitalizing on its ability to create friendship-based relationships and happiness with clients, thanks to the professionalism and constant availability of its welcoming GOs. The aim of Club Méditerranée is to gain market share in the leisure segment of the luxury hotel market, and to attract clients through innovation and its redesigned product portfolio. The value strategy put in place to achieve this aim is built on 5 pillars: a strong brand, taking Villages upscale so that 97% of Villages achieve 3- or 4-Trident status by 2008, optimizing distribution to make better use of the Internet, an upscale product portfolio that has been enhanced by the Bar & Snacking included offer and personalized as a result of room reclassification. Club Méditerranée has applied its innovation expertise to creating refined, generous vacations à la carte.
3
Interview
Henri Giscard d’Estaing, Chairman of the Board and Chief Executive Officer
With the relaunch and repositioning of its brand now in place,
>>
this year sees Club Méditerranée embark on the major strategic curve that will lead the company down the path to growth and profitability. This impetus will be spearheaded by innovation and the move upscale. Pioneering and alive to the expectations of our clients, we have invented a new style of all-inclusive “generous, refined and à la carte” vacations this year, which we are already offering in several Villages. This is the first of a series of far-reaching changes that will affect every part of the product portfolio…
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Annual report 2005
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Club Méditerranée is back in the black and reporting a net profit. What is your analysis of this performance? For the first time since 2000, we are reporting net profit of €4 million, or €9 million under IFRS. Our operating income rose by 28% to €22 million. Despite the €49 million impact of the Asian cyclones and Tsunami on our Villages, our revenue remained virtually unchanged at €1,590 million, showing summer growth of 3% (2.1% on a comparable basis). We are also seeing the benefits of initiatives implemented a year ago as part of our “Cap sur l’incomparable” project. These performances are very encouraging for the company and its staff members, and all the more remarkable since they have been achieved in what is still a very unfavorable business climate for the tourism industry. Natural catastrophes in Asia and the Americas led to the closing down of five of our most profitable Villages, depriving the Group of 40,000 clients and €49 million in revenue, although our insurers have covered €37 million of that total. Lastly, the property transactions conducted during the 2005 financial year generated €40 million, which enabled us to return to net profit.
“Cap sur la valeur” (Setting course for value): is that your new motto? Unveiled this year, our new signature “Discover new worlds, discover new people” expresses the Club Med value of openness to others, which is so important in a world where the trend is to be self-centered. We have everything it takes to succeed in this discovery of others, by which I mean the reputation of our brand, our exceptional destinations, our unparalleled expertise in all-inclusive vacations and our hugely talented GOs. Over the years, all these features have been imitated and copied, which has turned away some clients and somewhat tarnished Club Med’s image. So, we have reacted energetically to that challenge, by adopting an innovative
positioning that is upscale, friendly and multicultural, whilst remaining loyal to the essential spirit of Club Med. Defined in 2004, our strategy is to make the necessary move upscale to attract clients with a high potential and to increase the Group’s profits. This strategy is already paying off. In those destinations where we have already adopted this positioning – La Palmeraie and the Riad in Marrakech, Turquoise, Bali, etc. – we have attracted increasing numbers of new and existing clients… all of whom have left very satisfied. The results for France, our leading market, are telling: we gained 4,000 clients during the year, sold 4% more hotel days than in 2004, boosted our business volume by 9% and increased Hotel Day revenue by 5%. Further confirmation that our value-based financial model is working well; a fact also reflected in the 2.6% growth seen in RevPAB (Revenue Per Available Bed) as a result of Mix/Price and occupancy rate improvements.
To what degree would you say that 2005 saw the birth of a new Club Med? With the relaunch and repositioning of its brand now in place, this year sees Club Méditerranée embark on the major strategic curve that will lead the company down the path to growth and profitability. This impetus will be spearheaded by innovation and the move upscale. Ever more pioneering and in tune with the expectations of our clients, we have invented a new style of all-inclusive “generous, refined and à la carte” vacations this year, which we are already offering in several Villages. This is the first of a series of far-reaching changes that will affect every part of the product portfolio, with a number of projects running in parallel: the global relaunch of the brand started in 2005, the continuing move upscale of our Villages with around €100 million of direct investment per year between now and 2008, the deployment of a reinvigorated, personalized upmarket range, the adaptation of our human resources and the synergies we are developing with the Accor Group. 5
The first positive result to come out of the summer season was the fact that we won back clients in France, which is encouraging, especially since market trends show that the upscale segment is growing faster than the rest of the industry.
ing our borrowings significantly this year. With this financial base in place, we have been able to secure the support of the largest financial institutions for the joint funding of some of our projects; funding that is in addition to our own direct investment.
What is your assessment of the synergies achieved with your partner Accor?
How is 2006 looking?
Synergies are being exploited in both Groups, and the teams are working together on many shared projects, including the reciprocal promotion of brands and products, the sharing of premises in some countries, central purchasing and the creation of mobility opportunities for staff. In 2005, these synergies generated €11.4 million for the two Groups, and we expect that figure to rise to €26.2 million in 2006. This partnership is certainly proving to be a major asset in deploying our value strategy.
You’ve been looking at the extent of your property portfolio this year and getting to grips with its management. What are your expectations of this new business activity? Club Méditerranée is not about property ownership. From this year onwards, all the conditions are in place to enable dynamic management of property valuation, because with over 90% of Villages now up to 3- and 4- Trident standard, we have completed most of the work required to restructure our estate. The rise in the property market has also come at a good time, and our property portfolio has been valued at nearly €1 billion (under IFRS). We believe that the disposal of selected properties and assets will provide us with a springboard from which to implement our strategy, and has contributed to reduc-
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Annual report 2005
At October 31, 2005, bookings for winter 2006 were up by 5.2% in terms of income, compared with the same period of 2004. In terms of volume, it means a 7.6% increase for the whole of Europe, and 8.1% for France. Given the muted state of the tourism market, this puts us well on the way to gaining market share. This trend should be confirmed for the summer season, as the new product range is implemented in all our Villages. Conveyed via dynamic distribution networks, these innovations are major growth influences and should prove their worth in 2006 and 2007. So we are enthusiastic and confident about our future, and happy that we can rely on the support of our shareholders and clients and the motivation of our people.
Board of Directors The Board of Directors comprises 12 directors, 7 of whom are independent*.
Henri Giscard d’Estaing, Chairman of the Board and Chief Executive Officer of Club Méditerranée David Dautresme*, Vice Chairman Senior Advisor at Lazard Frères Saud Al Sulaiman* Partner and CEO of Rolaco Thierry Delaunoy de La Tour d’Artaise* Chairman of the Board and Chief Executive Officer of Groupe SEB Gilles Pélisson CEO of Accor (subject to appointment by the AGM of March 14, 2006) Paul Jeanbart* CEO of Rolaco Holding Pascal Lebard* Management Board member of Worms & Cie
Philippe Adam Director of Hotel Strategy and Development at Accor (subject to appointment by the Board of Directors) Pierre Todorov General Secretary of Accor Kiyoshi Ujihara* Senior General Manager for International Operations at Nippon Life Insurance Company The Board of Directors includes three specialist committees:
– the Strategy Committee – the Audit Committee – the Remunerations Committee.
Véronique Morali* CEO of Fimalac Yann Caillère CEO of Southern European, Middle Eastern and African Hotels and Sofitel Operations at Accor (subject to appointment by the Board of Directors)
7
Corporate governance
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Annual report 2005
Management Committee
Henri Giscard d’Estaing Chairman of the Board and Chief Executive Officer François Salamon Executive Vice President and Chief Operating Officer, Europe Michel Wolfovski Executive Vice President and Chief Financial Officer (including Information Systems, Legal and Purchasing)
Laurence Berman CEO of Jet tours, Club Med Découvertes and Ground Handling Services Franck Gueguen President of Club Med Gym and Club Med World, and Vice-President of Quality, Health and Safety Laurent Lassiaz Executive Vice President, Europe
Caroline Puechoultres Vice President, Strategic Marketing Olivier Sastre Vice President, Human Resources Joël Tiphonnet Vice President, Asia John T.A Vanderslice CEO Americas
Management Committee Left to right: Joël Tiphonnet, Olivier Sastre, Laurent Lassiaz, Laurence Berman, Henri Giscard d’Estaing, Caroline Puechoultres, Michel Wolfovski, Franck Gueguen, François Salamon, John T.A Vanderslice.
Corporate Executive Committee The members of the Management Committee and:
Executive Committee Europe
François Salamon CEO Europe Alexia Augier Laurent Lassiaz Vice President, Financial Executive Vice President Control Europe Wafik Azmi-Salib Jean-Jacques Bohérout Vice President, Purchasing Vice President, Resources/Yield Francis Beleau Vice President, Accounts Michel Boyer Vice President, Transportation Véronique Bertrand Europe Club Med/Jet tours Vice President, Club Med World Sylvie Brisson Vice President, HR Patrick Calvet Vice President, HR Village GO Development and Management Paul-Henri Carton Vice President, Information Hervé Cacheur Vice President, Support Systems Services Europe Philippe Ernoult Arthur Courtinat Vice President, Group Cash Vice President, Management Management and Finance Control Europe Katia Hersard Juvenal da Cunha Vice President, Brands Vice President, Service Thierry Orsoni Deployment Europe Vice President, Patrick Dauguet Communication Global Vice President, Julien Renaud-Perret Vice President, Development Construction Eric Georges and Property Assets Vice President, Operations Edouard Silverio Vice President, General Counsel France Cédric Gobilliard Frédéric Tarkowski Vice President, Administration Vice President, Sales Europe (exc. France and Italy) and Compensation
Executive Committee Executive Americas Committee Asia
Jean-Luc Hélary Vice President, Operations for Morocco, Tunisia and Mauritius Yves Lebon Vice President, HR Village GO Europe and Africa Olivier Marque Vice President, Operations Middle East Giorgio Palmucci CEO Italy Philippe Pichlak Vice President, Club Med Business, Local Authorities & Club Med Events Géraldine Pouvelle Marketing Manager Europe Sylvain Rabuel Vice President, Marketing France Georges Roll Vice President, Operations Iberian Peninsula, Sub-Saharan Africa and Cruises Philippe de Saint-Victor Vice President, Sales and Marketing France Stéphane Vidal Vice President, European Call Center
John T.A. Vanderslice CEO Americas Gino Andreetta Vice President, Operations Americas Janyck Daudet CEO South America Paula Hayes Vice President, Sales and Transportation North America Eileen Kett Vice President, General Counsel North America Brenda Kyllo CEO Canada Alain Postic Vice President, Finance North America
Joël Tiphonnet CEO Asia Olivier Jolivet Vice President, Operations and Finance Asia Heidi Kunkel Vice President, Sales Australia and New Zealand Philippe Mahouin Vice President, Sales South East Asia Masaru Morimoto CEO Japan Houria Osmani Vice President, Human Resources Asia Pacific Jacky Sang CEO Korea
9
1,985 1,744 1,609 1,600 1,590
01
10
02
03
04
05
50
01
-3
02
-6
03
17
04
22
05
- 70
- 62
01
02
- 94
03
- 44
04
Published revenue
Operating income
Net income, Group share
(€ million)
(€ million)
(€ million)
Annual report 2005
4
05
754
631
488
444
467
3.3% 18.2% 36.8%
421
396
390
389
7.4% 240 Net indebtedness Shareholder equity
01
02
03
04
05
12.2%
France: 585 Rest of Europe: 351 Americas: 194 Asia: 118 Jet tours: 289 Other activities: 53
22.1%
Net indebtedness and shareholder equity
Revenue by zone of origin and activity
(€ million)
(percentage and € million)
The year in figures Revenue remained stable between 2004 and 2005, but showed a rise of 2.7% when the €49 million negative effect of natural catastrophes in Asia and the Americas were excluded. These events resulted in the temporary closing down of 5 of our most profitable Villages. This creditable result is explained by a positive Mix/Price effect of €55 million, in conjunction with implementation of our strategy to move upmarket. Operating income for the year was €22 million, representing an increase of 28% over 2004, whilst at €4 million, the net income figure showed a profit for the first time since 2000.
11
Stock markets and shareholding Shareholding distribution at January 2, 2006 Shares
Voting rights
Accor Rolaco Nippon Life
28.9% 4.7% 4.0%
34.4% 5.6% 4.7%
Total Board of Directors
37.6%
44.7%
Treasury shares Employees Richelieu Finance French institutions Foreign institutions Public and other
1.4% 0.6% 24.7% 13.8% 12.6% 9.3%
– 1.3% 10.4% 17.1% 15.1% 11.4%
Investor relations and private shareholders In accordance with stock market regulations, Club Méditerranée regularly and consistently provides all its shareholders with information about its results and strategic objectives. As part of this commitment to transparency, the Group adapts the information it supplies to suit different investor profiles. – The Investor Relations Department provides institutional investors and financial analysts in France and abroad with information about the strategy pursued by the Group, its financial results and major developments. In addition to the usual information meetings held to accompany the announcement of the full-year and halfyear financial results, a number of other events are held during the year to give investors the opportunity of meeting the Group’s senior executives. – Private shareholders have a dedicated contact in the Investor Relations Department to answer questions about our strategy and development and, more specifically, about our share price or the different forms of share ownership. All Club Méditerranée financial documents are available on request. 12
Annual report 2005
9.3% 12.6% 37.6%
13.8%
24.7%
1.4% 0.6%
Total Board of Directors Treasury shares Employees Richelieu Finance French institutions Foreign institutions Public and other
The corporate and financial website at www.clubmed.com offers a wealth of regularly updated information, including recent press releases, analyst presentations in support of the annual and half-yearly reports, stock price trends and a webcast of the half-year and full-year results presentations.
The Shareholders Club The Shareholders Club is designed to encourage the loyalty of our private shareholders by establishing a personalized relationship with members. The Club provides shareholders with regular information about the company and its financial results: – Members automatically receive the annual report and Trident. – Members also receive personalized mailings of the quarterly Shareholders Club Newsletter, which contains a message from the Chairman of the Board and Chief Executive Officer, the latest news about the Group and Villages, and share price data.
Market indicators in €
Share performance in € Number of shares traded
At 31.10 2005
At 30.12 2005
Highest share price
38.98
42.28
42.28
45
600,000
Lowest share price
30.12
34.00
34.00
40
450,000
Current price
35.30
36.45
39.32
35
300,000
30
150,000
25
0
Created in 1999, the Shareholders Club now has approximately 2,000 members.
1/12/05
1/11/05
3/10/05
1/09/05
1/08/05
3/01/05
– A shareholder relations hotline. A member of the Club Méditerranée Investor Relations Department is available to answer practical questions about Club Méditerranée shares and the latest company news. – Preferential rates designed to encourage members to try our products*.
Traded volume
1/07/05
761
1/06/05
706
2/05/05
683
(€ million)
SBF 120 index
1/04/05
Market capitalization
1/03/05
19,358,005 19,358,005 19,358,005
1/02/05
Number of shares
Club Méditerranée
30/12/05
At 31.10 2004
Shareholder information Caroline Bruel: Vice President, Investor Relations and Financial Communication Tel.: (33) 1 53 35 32 09 – Fax: (33) 1 53 35 32 73 Michèle Lee: Private Shareholder Relations and Shareholders Club Manager Tel.: (33) 1 53 35 32 66 – Fax: (33) 1 53 35 32 73 Full investor information is available at:
For more information about the Shareholders Club, shareholders in France should call:
www.clubmed.com
n° 0 810 186 186
* Please refer to the detailed conditions of Club Méditerranée Shareholders Club membership.
Calls are charged at the local rate
Club Méditerranée share data Club Méditerranée shares
OCEANE Bonds
– ISIN code: FR0000121568
Number of bonds issued
– Traded in compartment B of Euronext Paris – SBF120 index – SRD-eligible
Maturity
ISIN FR0000180184
ISIN FR0010130732
2,404,733
3,092,783
November 1, 2008
November 1, 2010
Face value
€58
€48.50
Coupon
3%
4.375%
5.25%
4.375%
Yield to maturity Conversion parity
1 Club Méditerranée share per bond (subject to adjustment clauses)
Redemption price
at 01.11.2008 116.94% of issue price
at 01.11.2010 at par value
13
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Annual report 2005
The new Club Med becomes a reality 2005: the relaunch of the brand positions Club Med as upscale, friendly and multicultural. 2006: the reconfiguration of Villages is central to the upscale strategy. Within three years, all Villages will be 3- or 4-Tridents. 2006: a new refined, generous, à la carte range is developed. Successfully tested in 2005, it will be widely implemented during the summer 2006 season. GOs make a major contribution to change: motivated and highly-trained, their talent reflects the new face of Club Med. The move upscale fuels distribution: combined with the solid commitment of our agents, the excellent performances delivered by the networks in promoting the new face of Club Med bodes well for dynamic sales in 2006. 15
The new Club Med becomes a reality
2005 – brand renewal Its brand is an essential asset of the Club Méditerranée Group, and extends beyond individual products to convey an image and values that are deeply rooted in the collective consciousness. The widespread introduction of all-inclusive packages last year had the effect of blurring this image by bringing it too close to that of mass package holiday operators. In 2005, Club Med strongly reasserted its unique and innovative character with a new upscale, friendly and multicultural positioning that translates into a human, friendly and generous luxury; a luxurious way to live together. The result is a rejuvenated and upscale brand that communicates at global level. The brand: winning new clients and leveraging growth
In France, this new positioning aims to attract the top 20% of the population with the highest incomes.
The purpose of the major investment made in relaunching the brand is to win back clients and show them that the reborn Club Med can meet all their expectations. The secondary objective is to attract a new target client group that has higher potential and is more demanding.
Surveys show that this category accounts for 2.2 million potential clients likely to be interested in a more refined product range. At present, Club Med has only 450,000 private clients in France. Attracting 20% of this potential market would enable Club Med to double its size in its most important market.
Effective campaigns In France, where the campaign was broadcasted on television for 12 weeks, the result has been a high increase in bookings from lapsed clients. The two
The repositioning was a far-reaching exercise that gave rise to work on every channel of brand expression.
advertising waves in March/April and May/July delivered
March 6: the advertising campaign
booking increases of 51% and 22% respectively, compared
On March 6, 2005, the new “Faces” advertising campaign designed by Publicis Conseil was broadcasted on all French television sets. Adapted for Belgium and Switzerland, it was supported by a press campaign in other European markets, then deployed in the Americas and Asia at peak booking times. This was the first time
with the figures for the same periods of 2004; an achievement that is all the more impressive given the lackluster state of the tourism industry. In Japan, brand awareness rose by 14% amongst 25 to 44-year-olds.
16
As the cornerstone of the strategy to move upmarket set up in 2004, the brand relaunch is designed to show clients that Club Med heard what they had to say, and is now responding by offering them the vacations they dream of.
Annual report 2005
ever that Club Med had conducted a communication campaign on such a scale. The campaign was in two complementary parts: in the French market, a 30-second TV ad on the new face of Club Med was followed by a 10-second “2 Days Free” or “€1 Flight” promotion. The aim was to unveil the new positioning and promote exceptional destinations to win back former and occasional clients. As part of this campaign, Club Med also revealed its new signature “Still So Much World to Discover”; a slogan that sums up the Group’s new mission of offering its clients the very best surroundings in which to be together and meet others. The logo also received a facelift to convey the elegance, sophistication, modernity and worldwide openness of the brand. The typography became lighter and the Trident symbol subtly reworked in the style of oriental calligraphy.
June 10: launch of the new Club Med style At the same time, the teams were hard at work on a new visual identity developed by Desgrippes Gobé, and unveiled at the reopening of the Otranto Village in Italy. This highly creative identity sets Club Med clearly apart from upscale hotels and Club hotels. Dynamic, welcoming and full of movement and color, the new Club Med style completes the repositioning of the Group and the interpretation of its new brand vision. The challenge is to encourage rapid identification of the brand and deliver maximum return on communication investment. The new graphic charter applies to all signage and communication media, including stationery, publications, press kits, letters, mailings, travel agencies and web sites, and gives them an upscale, friendly, multicultural style. It delivers consistency of communication at the same time as giving each Village strong branding that makes a clear statement about its status and personality.
The charter will be deployed in all Villages during 2006, beginning with Peisey-Vallandry, Kani and Les Boucaniers, and continuing into 2007. Desgrippes Gobé will also be developing and applying a corporate communications graphic charter in 2006.
“A new luxury to be enjoyed together” In the future, Club Méditerranée will be seen as a strong global brand firmly rooted in the luxury market, and one which attracts those who share a common vision of vacations: a vision built around a personal, celebratory and enhancing experience, where friendliness is a matter choice rather than imposed on clients, and where luxury is far from intimidating. This vision also includes the opportunity to live together in a place where the atmosphere and service are quite unique, and where wellbeing, pleasure and choice are central to the experience. In 2006, the communication campaign will enter a new phase in which the brand TV campaign will be coordinated with a press, Internet and below-the-line campaign focusing on products and quality.
An impressive array of awards The many initiatives implemented by the Group as part of communicating its new positioning have attracted almost as many awards: – The Lion de Bronze Créativité Image award for the Faces campaign; – The Top Com d’Or for the new brand charter and its interactive system, as well as the special jury prize for the Two Days Free offer; – The Prix du Design Global de Marque awarded by Stratégies magazine; – The Mention spéciale au Prix du Luxe awarded by Stratégies magazine.
17
The new Club Med becomes a reality
2006 - reconfiguring our Villages as a central plank of our upscale strategy Located in exceptionally beautiful and intriguing destinations, our Villages symbolize the Club Méditerranée philosophy, and play a key role in the power of the concept to attract clients. Target: 97% of Villages in the upscale segment within 3 years Club Méditerranée has undertaken major reconfiguring of its estate of Villages for five years now in order to meet the expectations of its clients; a process that has intensified since the launch of its strategy to move upscale. A total of 70 Villages have been renovated, 20 new ones created, 20 upgraded and 50 non strategic sites closed. In 2005, the Group acquired the resources necessary to ensure that all its Villages will have adopted the new positioning within 3 years – half of them 3-Tridents, and
Agadir: giving new life to a legend The legendary Club Med Village at Agadir is famous for its ideal location by the sea, for having one of the most beautiful golf courses in Morocco and for the entertainment provided, but accommodation needed to be improved. After two month’s work, the Village reopened at the end of October 2005. Still a 3-Trident Family destination, it has been enhanced and rejuvenated in a decorative style that draws heavily on the techniques of Moroccan art. As part of the policy of moving upscale, 80 rooms have been enlarged and converted into Deluxe rooms. Services now include Bar & Snacking included offer, an upscale Spa, the full range of children’s clubs and the recently introduced Club Med Baby Welcome for parents with very young children.
18
Annual report 2005
the other half 4-Tridents. This target will be achieved through the creation of new Villages, but also, and more importantly, through the closing down of hut Villages, the upgrading of 2-Trident Villages and an increase in the number of 4-Trident destinations. A number of major programs have been set up to achieve this target, and the results are already there to be seen in the winter 2005/2006 season.
Significant acceleration in the move upscale At the start of 2005, over 90% of our Villages were classified as 3- or 4-Tridents, compared with 66% in 1998. This proportion rose to 94% in the winter 2005/2006 season, with the opening of the 4-Trident PeiseyVallandry Village and the completion of a number of major projects, including the 4-Trident reconstruction of the legendary Villages Les Boucaniers in Martinique (formerly a 2-Tridents) and Kani in the Maldives. Other upgrades included the 4-Trident renovation of Cervinia in Italy and the upgrading of Aime la Plagne to 3-Tridents. The upmarket move of Villages into 4-Tridents is accelerating: in the winter 2005/ 2006 season, 42% of Villages were 4-Tridents, compared with 35% in winter 2004/2005. This momentum will be maintained with the early opening of Hammamet in Tunisia in spring 2006, and the renovations programmed for Opio, La Plagne 2100 and La Caravelle in Guadeloupe, all of which will be upgraded to 4-Trident standard. Plans for the next two years also include the 4-Trident reconstruction of Cancun Village in Mexico, and the creation of a second Club Med destination at Albion on Mauritius and Brazil’s fourth Village at Buzios, both to 4-Trident standard.
Profitable, high-potential investment that attracts clients Confirming just how appropriate this strategy is, the most upscale Villages recorded increased client satisfaction in 2005, as well as a higher number of clients saying that they plan to return. Both these increases are proportional to accommodation and service quality. The proportion of very satisfied clients rose by an average of 57% compared with 2004, with by far the highest scores coming from the new and renovated 4-Trident Villages. Club Med’s most prestigious destination, the Riad in Marrakech, led the survey with 96% client satisfaction in its first season. Opened in winter 2004/2005, the Val d’Isère Village trebled its satisfaction score and quadrupled the number of very satisfied clients. The Palmyre, Bali and Turquoise Villages all achieved 95% satisfied or very satisfied clients. Between 1998 and 2005, the overall number of very satisfied clients rose by 30%, with over 90% saying that they intend to return to Club Med.
Real estate values offer new opportunities Valued at €1 billion under IFRS, the quality of its locations and the reputation of its brand make Club Med Villages a substantial reservoir of resources for the Group, which is taking advantage of the upturn in the real estate market to introduce a policy of targeted disposals this year. The real estate assets at Peisey-Vallandry were sold at a profit before the Village had even opened for business. The attractiveness of the Club Med brand seems to create value everywhere, so the Group has negotiated a share in the profits generated by sales of luxury villas to be built near the new Albion Village on Mauritius.
Special emphasis on joint funding Major public and private financial institutions and real estate companies are involved in Club Med’s
These statistics are also reflected in the Group’s results. In France, where implementation of the financial model is most advanced, 2005 saw the Group record its first volume growth for eight seasons, with revenue per hotel day up by 4.3%, and business volume up by 9.1% in a trend that was confirmed in winter 2005/2006, which showed a further 8.6% increase in bookings by value.
future flagship programs. The Opio and La Plagne
These performances confirm the effectiveness of the value strategy of the Club Méditerranée Group. Eventually, the price increases made possible by upscale comfort and accommodation should extend to 65% of all Villages. This will then be a vital influence on the future growth of the Group.
European Investment Bank, the French Development
2100 renovations will be jointly funded by France’s leading real estate company Gecina. The Buzios Village will market the condominium principle to private investors in Brazil. The construction of the Albion Village will be partly funded by a consortium that includes the Agency, Orascom Hotel Holdings and the State Bank of Mauritius. In fact, only half the total investment of €200 million to be invested in 2006 will come from the Group’s own resources.
19
The new Club Med becomes a reality
2006 - a new refined, generous, à la carte product range In order to regain the most demanding clients and attract a new high-revenue market, Club Med has created a new and distinctive product range whose ingredients were tested in 2005. The successful outcome means that the new range will be enhanced and widely implemented during 2006. More generous services Pioneering as ever, Club Med is reinventing the allinclusive concept. The new package covers not only bar and restaurant purchases, but also every other Village service, such as children’s clubs, sports, other activities and entertainment. Amongst the many major innovations of the year, the following examples were particularly well received: – Bar & Snacking included. Launched in Europe on May 8, 2005, this option offers all guests the opportunity to forget about paying separately for every drink and meal they consume on vacation. After its successful launch in the USA and in our “Living Life to the Full” Villages, this service was introduced in all our snow Villages during the winter, and will be available in all Villages as part of the standard product as of summer 2006. At the same time, the Club Med Pass, which acts both as a room key and a dedicated payment swipe card is also being introduced in all Villages to make life simpler for our clients.
The Bar & Snacking included offer is a dynamic part of the new product range Tested in a number of European Villages, the Bar & Snacking included option made a 2.5% contribution to revenue per hotel day, and proves to be a key element in increased client satisfaction. 20
Annual report 2005
– Club Med Baby Welcome, which offers a full range of practical services, including equipment, nursery care and special services. – The Club Med Passworld concept, which offers teenagers a place designed specifically for them and specialist instruction in activities they like, such as the Internet, MP3, mixing decks, video workshops, jewelry, tattooing, hip-hop, circus skills and themed evening events. Tested successfully at Punta Cana and in Europe, the concept was extended to include four more Villages in winter 2005/2006: Peisey-Vallandry, Kamarina, Vittel Le Parc and Cherating Beach.
Greater choice of activities The traditional food & beverage and entertainment services have been extended and improved. Garden parties and special dining events for gourmet guests are just two examples of the new features introduced to surprise and attract clients. There are now 60 sports activities on offer, with the widespread introduction of golf and tennis academies offering expert instruction for skilled players. New activities based on local culture will soon be introduced into Villages, and will include singing workshops and Moroccan cookery classes in Marrakech, and the opportunity to discover a country through all 5 senses at Athénia, Beldi, Les Almadies, Marrakech la Médina and Puerto Maria. Mountain Villages will offer hikes and themed excursions for all guests aged 6 and over. “Discovery” trips will enhance the family vacation experience in Senegal, new tours will be introduced in Israel and Turkey, and a new itinerary in Egypt.
A more personalized vision of vacations The “Vacations à la carte” range designed by Club Med allows everyone to adapt their vacations to suit their own desires and potential, whilst remaining within a controlled budget. Experiencing the exceptional, living sports with passion, feeling rejuvenated, living life to the full, discovery, having a taste of everything … the Trident brochure and the Club Med Villages are now segmented into these six “vacation pleasures”, which is the first stage in introducing personalization into every part of the product range. The second stage is “Comfort à la carte”, which offers clients a choice between five room categories and three comfort levels. This summer, clients will be able to choose between a Club room, a Club room with a view, a spacious Deluxe room, a Deluxe room with a view, and a suite. Room rates have been changed accordingly. This principle of repricing rooms on the basis of quality and space represents a very significant growth opportunity for Club Med: in Europe, every point of additional accommodation capacity at the higher price generates an additional €1 million (at constant price rise rate and sales volume). Given that only 20% of capacity in Europe falls into this category, it is clear that the potential is very significant.
agreements with national carriers in Europe, including Air France in France, TNT in Belgium and Eurofly in Italy. These exclusive agreements ensure that Club Med clients receive a special level of service similar to that offered on scheduled flights, with free newspapers, headphones, etc. In Asia and the Americas, the challenge is to provide better access to outlying Villages. In Asia, a new charter agreement means that clients from Taiwan will find it easier to travel to Kabira in Japan. In North America, there are more charter flights from New York to Martinique and Guadeloupe, and direct daily flights from Fort Lauderdale to Columbus Isle and Punta Cana. In parallel with these changes, the “Transportation Quality Charter” already implemented by the Club Méditerranée Group with Star Airlines and Axis Airways will be extended to new partners operating non-scheduled flights.
New exclusive Air France charters On November 23, 2005, Air France and the Club Méditerranée Group signed a charter agreement for summer 2006,
More flexible flights
under which Air France will serve seven destinations from
Our research shows a strong desire amongst clients to have the freedom to choose their own flight times and class of travel, so Club Med now offers a choice of scheduled airlines and special charter flights – a unique service. The dynamic booking system gives travel agents and clients booking over the Internet real-time access to airline booking systems, and allows them to book the flight that best suits their needs. The dynamic booking system was extended to cover all of Europe in 2005. In order to guarantee its clients a high level of comfort and maximum security, Club Méditerranée is entering into charter
Orly airport: Agadir, Marrakech, Tunis, Djerba, Athens, Calvi and Ajaccio. The agreement provides improved travel conditions for Club Med and Jet tours clients (better reliability, scheduled times, in-flight services, etc.) supplied by one of the world’s leading airlines. The agreement forms part of a special partnership which was renewed in December 2005 for a further three years. This summer, 40% of all clients traveling from France will fly with the national carrier, and 90% will fly with a French airline. 21
The new Club Med becomes a reality
Cap sur les talents (focusing on talent): adapting skills and culture As the leading ambassadors of Club Med, the 16,000 GOs and GEs (Gentils Organisateurs and Gentils Employés, friendly organizers and employees) are key to the new value strategy, which sets client satisfaction and loyalty as absolute priorities. As front line contributors to change through the “Cap sur l’incomparable” corporate project, they are committed to its challenges and play an active part in its deployment. They are directed and supported by a proactive human resources policy that, having implemented the new strategy management systems, embarked on a new project in 2005: talent management.
At the same time project mode and networking became standard practice, managers were asked to get involved in directing improvement projects outside their normal fields of expertise. This cross-disciplinary initiative involved a Resources Team of 100 high-potential staff, and generated many innovations, including Comfort à la carte.
Management to pilot change
The various components of the offer – generosity, personalization and refinement – have resulted in the repositioning and enhancement of some of Club Med jobs. In 2005, the company added two new job categories: Hotels and Leisure. The creation of a Hotel Manager job category demonstrates Club Med’s commitment to taking its professionalism to the highest level, in line with its upscale, multicultural, friendly positioning. The primary mission of the Hotel Service Manager is to improve the quality of hotel service. This is followed by increasing profit center (bar) revenue, whilst managing and training his or her team. Of the 10 new Hotel Service Managers, 6 are from Club Med and 4 have been recruited from Accor. The team has been appointed and trained jointly by the Club Med University and the Accor Academy.
Started last year, the initiative to align management systems with strategy was implemented worldwide during 2005. The beginning of the year was marked by confirmation of the five basic values: Multicultural, Pioneering, Friendliness, Freedom and Responsibility. All were incorporated into a major appraisal and training program designed to unite managers around the same objectives, gain their commitment and help them to lead the change process amongst GOs.
A multicultural reality 40 countries worldwide. 96 nationalities. 30 languages spoken. 70% international GOs per Village on average. 84% of Villages have GOs of 7 nationalities or more. 35% of Villages have GOs of 15 nationalities or more.
22
Annual report 2005
Reinforcing client contact and service jobs
A special “créateur d’ambiance” (ambiance creator) training course was also developed to help Leisure Managers succeed in one of the biggest challenges of the upmarket move: the transition from entertainment to
atmosphere. This course was taken by 80 trainees in 2005, and a creativity group has been formed to support the initiative. During the same period, the “sens du détail” (attention to detail) management course introduced in 2004 was deployed in the Villages, as were the “communication par l’excellence” (communicating through excellence) courses. The majority of staff attended these courses, with most trainees coming from the Hotels job category. In the same way, Sales Managers and their staff in all zones also attended a course called “Cap Clients” (focusing on clients), which examined the transition from a volume strategy to a value strategy.
Identifying, encouraging and securing the loyalty of talented staff: a key priority Identifying and recruiting people with the right skills and personalities and allocating them to the right Villages is a very real challenge: every year, over 4,000 GOs are recruited and 14,000 staff allocated. In order to improve the way needs and staff movements are forecasted and the ways in which individual skills are managed, Human Resources functions have been restructured by job, and recruitment and assignment processes have been reviewed. Two groups have been created: a Recruitment group, whose task is to select those candidates best suited to fulfilling the future needs of Villages, and a Talent Development group responsible for allocating GOs and monitoring their progress on an individual, personalized basis. A Talents Committee made up of “Chefs de
Village”, Operations Managers and Human Resources Managers has also been introduced to examine existing skill levels in each job category and direct future training plans. In this way, Club Med is laying the foundations for a personal development culture that seeks to retain the best GOs by offering them career prospects to suit their personalities, expertise and ambitions.
A new organizational structure for 10 Villages In spring 2005, ten Villages, including La Palmyre, Marrakech and Peisey-Vallandry introduced a new management method and organizational structure designed to make client satisfaction the central focus of all staff. Under the new structure, a number of new posts have been introduced to support the “Chef de Village”: the Hotel Service Manager, Leisure Manager, person in charge of Stocks and Cost Controller all ensure service quality and team professionalism within their individual areas of expertise. These positions are additional to the existing management positions of Human Resources Manager, Finance Manager and Maintenance Manager. Pro Signs will be developed for the new organizational structure in 2006.
23
The new Club Med becomes a reality
Moving upscale stimulates direct and indirect distribution Attracting and retaining a new core target group of clients with high revenues requires some far-reaching changes in distribution, especially in terms of network deployment, service and product training. Greater sales force presence As the spearhead of the sales mission, the direct and indirect sales forces have received additional training and support to help them adopt the new positioning. In Europe, for example, over 162 GOs were involved in delivering personally and before its official release the new Trident brochure and its launch kit in agencies. At the same time, the training programs for direct and indirect sales teams and agents was extended and intensified in all zones. As part of this initiative, 800 European travel agents spent three days in Djerba to experience the friendliness and refinement of our new services at first hand. 179 agents received training in Asia, whilst the top agents in the Americas were invited to attend special motivational programs.
A Club Med agency for Covent Garden The first English Club Med agency was officially opened in March 2005 in one of London’s busiest shopping hotspots. Acting as a showcase for the Club in a city where opening a store costs a lot less than running an advertising campaign, it welcomes clients in a very upscale environment. A widescreen plasma TV and 4 LCD monitors broadcast videos during the day, and clients can use two Internet terminals to take virtual Village tours. At night, the plasma screen is displayed through the window to attract the attention of passers-by. 24
Annual report 2005
The new concept has secured the commitment of the profession all over the world: in Europe, Club Med and Accor were awarded the prize for best stand at the Top Resa exhibition; in Asia, Cherating was elected “Most Beautiful 5-Star Resort” by Hospitality Asia, and in the Americas, Punta Cana was elected “Best Destination for Children” in a number of family magazines. The Peisey-Vallandry and Marrakech Villages have been chosen by major retailers as preferred conference venues.
Larger, stronger worldwide networks Carried by this momentum, the French indirect sales network (set up in winter 2004 to target clients outside Paris) increased its sales by 51%. This operating mode is now a main tool of Club Med’s growth, and contributed 8.3% of sales in 2005, compared with 5.8% in 2004 and 0.8% in 2003. In this dynamic background, the agreement with Thomas Cook Voyages to distribute Club Med and Jet tours products was renewed just before the 40th anniversary of the partnership. In other European countries, Club Med has continued with its policy of maintaining a presence in local markets, with the development of Club Med agencies in Switzerland, Belgium and Israel, and the introduction of direct representatives for German agencies. Russia and Spain are both high-potential markets where Club Med now has a presence.
Synergies with Accor: impressive initial results Synergies with our majority shareholder generated a
Innovative products and services – In seminars and events, the
total of €11 million; €5 million for Club Méditerranée
two groups have created a number of unique joint products, includ-
and €6 million for Accor. Together with new opportu-
ing Big Event, which targets large groups whose requirements can
nities already budgeted for by the two groups, conti-
only be met through the joint capacity and expertise of Accor and
nued exploitation of the synergies begun in 2005 should,
Club Med. Thanks to these synergies, the first Big Event has been
with the full commitment of all teams, generate around
contracted in 2006 for a CAC 40–listed company that will bring
€26 million in 2006.
together 1,500 staff members in Djerba Village. Synergies are also
Increasing sales links – Operational since December
making a practical difference to the teams in the field. In Australia,
2004, the links between the Clubmed.com and Accor.com
Germany and Mexico, Club Med and Accor teams are already shar-
web sites generated 500,000 hits during the year. The
ing the same premises.
Accor Group has incorporated the range of Club Med
Optimizing distribution – Accor subsidiary Carlson Wagon Lit
Villages in its bookings search engine and loyalty pro-
Travel has included the full range of Club Med products in its port-
grams, whilst the Club Méditerranée Group has included
folio, and converted 6 of its agencies to the Jet tours brand in 2005,
Accor hotels in the Jet tours brochure.
with a further 12 to follow in 2006. During 2005, Carlson Wagon Lit
General application of expertise – UNew fitness areas
Travel ran many marketing campaigns aimed at increasing the mar-
have been designed and built in a number of Sofitel and
ket share of Club Med and Jet tours products in its network. In
Novotel hotels using Club Med Gym expertise. Club Med
France, the Club Méditerranée Group is studying the possibility
teams have attended training sessions hosted by Lenôtre,
of giving this new partner responsibility for its ticketing.
the Accor Group’s reference in upscale catering. These
Optimizing purchases – Over 170 contracts were renegotiated and
sessions will continue in 2006.
signed during the year, with the first savings coming through in March.
In Spain, our products are distributed through the 450 points of sale of the nationwide Corte Inglès department store chain, and a Club Med agency in Barcelona. In Asia, we have opened a second office in China, where the new Beijing branch generates as much revenue as the Shanghai one. Together with Korea and Japan, Northern China is quite definitely a market of the future for Club Med.
Our aim is to generate some €100 million of sales via the Internet in 2006, compared with €65 million in 2005. It is a realistic target given the way consumer behavior is developing. In the USA, online sales of Club Med vacations increased by a factor of 2.3 in 2005, to account for 18.6% of private sales. This performance was made possible by the introduction of three new web sites, one of which is exclusive to travel agents and allows them to access information and make bookings. The other two are the new e-commerce sites of Club Med USA and Club Med Canada, which have been adapted to suit the buying habits of the American market. The total budget devoted to Internet sales in North America has risen by 66%.
The programmed rise in online bookings Another distribution channel, and an important one in the context of relaunching the brand, the Clubmed.com web site has had a complete makeover. The visual treatment and layout have been completely reviewed to reflect the new look of the brand, whilst Virtual Village tours and easier browsing encourage online bookings.
25
26
Annual report 2005
Group business activity in 2005 The Villages commit to incorporating the component parts of the move upscale, and benefit from the arrival of new clients. Jet tours almost doubles its operating income and strengthens its innovative, upscale positioning. Club Med World, the Paris presence of Club Med, continues to grow amongst corporate users. Club Med Gym goes ever stronger, winning back its Parisian clients and deploying its brand in the Villages and Accor’s Sofitel and Novotel hotels.
27
Group business activity
The Villages In terms of content and results, the Villages reflect the continued application of the upscale strategy. The valuation policy and the rise in average prices that has flowed from it produced a positive Mix/Price effect of €55 million on revenue, which compensated for the reduction in capacity and hotel days sold. Compared with 2004, RevPAB (Revenue Per Available Bed) was up by 2.6% to €74.60 per hotel day. Hotel days sold
Volume
A hotel day is the sale (and therefore use) of a bed and all associated facilities to one client for one day. It is the most effective indicator of volume, since it combines the number of clients and their length of stay.
The “volume effect” refers to the impact on revenue or operating income of fluctuations in the number of hotel days sold. It reflects the sensitivity of the indicator to quantitative variations in Village business levels.
Occupancy rate and capacity
Mix/Price
The occupancy rate is the ratio, expressed in percentage, of the number of hotel days sold to total capacity.
The Mix/Price effect results from the combined effect of three trends: – changes in the retail price of vacations and associated transport for a given Village over a given period; – the influence exerted on average revenue by the distribution of adult and child clients in Villages; – the distribution of sales between Villages charging different rates relating, for example, to the comfort category or the positioning of Group sales for the year (high season/low season).
Capacity is the total number of hotel days available for sale during a season or year. The occupancy rate provides a means of measuring how a Village is filled to its best.
1,782 1,534 1,429 1,421 1,370
01
02
03
04
05
Number of clients (thousands)
12,184 10,309 9,590 9,251 8,948
01
02
(thousands)
28
Annual report 2005
03
04
05
Number of hotel days sold
72.0
01
69.0
02
67.0
03
68.9
04
Occupancy rate (%)
68.9
05
Village operating mode in 2005 (Villages operated) number of Villages
number of beds Properties
Rented
Europe Americas Asia
13,375 5,741 2,936
29,941 2,964 1,757
Managed
3,405
Total
22,052
34,662
% of Total
36.2%
56.9%
Total
Properties
Rented
Managed
Total
Europe Americas Asia
20 12 5
41 4 4
5
790
46,721 8,705 5,483
2
66 16 11
4,195
60,909
Total
37
49
7
93
6.9%
100.0%
% of Total
39.8%
52.7%
7.5%
100.0%
Villages
Beds
Capacity
Zones
Countries
Beds
Capacity
24 8 5 4 4 5 2 3 1 2 2 1 1 1
13,886 8,711 4,619 3,960 3,544 3,405 1,605 1,560 1,110 940 756 720 700 585
2,534,676 1,180,300 883,507 674,935 504,000 788,497 282,300 225,080 93,240 272,540 275,940 153,360 234,500 213,525
Asia
Japan Indonesia Malaysia Maldives Thailand Australia Polynesia
63
46,101
8,316,400
Total Club Med
Villages operated in 2005 Zones
Countries
Europe
France Italy Tunisia Turkey Greece Morocco Spain Switzerland Croatia Senegal Egypt Portugal Israel Mauritius
Total Club Med 2
1
394
137,159
Total Europe
64
46,495
8,453,559
3 2 1 2 1 1 1
2,110 1,674 1,430 1,410 635 530 472
747,470 559,492 454,740 351,500 231,546 193,752 154,652
11
8,261
2,693,152
Americas
Total Americas
Brazil Mexico Dominican Rep. USA French West Indies Turks & Caicos Bahamas
Total Asia Villas
Total villas
Mexico New Caledonia Turkey Egypt
Villages
2 2 1 2 1 1 1
1,125 1,475 800 632 521 475 300
347,950 538,375 224,000 39,820 149,319 173,375 109,500
10
5,328
1,582,339
5 1 1 1
444 155 126 100
162,060 56,575 20,160 19,800
8
825
258,595
93
60,909
12,987,645
29
Group business activity
163,000 North Americans
96%
92%
939,000 Europeans
5%
99% 2% 96% 97,000 South Americans
Client flows 92% of Europeans visit Europe, 96% of North Americans visit North America, 96% of South Americans visit South America, 99% of Asians visit Asia.
30
Annual report 2005
171,000 Asians
Club Méditerranée identifies two revenue sources: issuing zones and receiving zones. Issuing zones are sales revenue and sales cost zones (e.g.: UK, Belgium and Canada). Receiving zones are mainly local revenue and operational cost zones (e.g.: Morocco, Polynesia and Mexico). Club Méditerranée creates revenue flows between these zones, and particularly from Europe to Asia and North America. Most clients visit Villages in their own geographical zone. The main inter-zone flows are: 5% of Europeans visit North America, but represent 23% of all clients visiting this zone. Similarly, 2% of Europeans visit Asia and represent 9% of all clients visiting this zone.
Evolution of hotel capacity thousands of hotel days
Europe Americas Asia Total
2003
%
2004
%
2005
%
8,746 3,526 1,902
62 25 13
8,441 3,152 1,838
63 23 14
8,494 2,855 1,639
65 22 13
14,174
100
13,431
100
12,988
100
Evolution of capacity by comfort level percentage of total capacity
Huts and 2-Trident 3- and 4-Trident
2003
2004
2005
19 81
13 87
10 90
31
Group business activity
Village business activity by zone Europe-Africa: a new dynamic Already depressed by a lackluster economic climate, the European tourism market was disrupted by a series of undesirable events during the year, including the terrorist attacks in London, and several aircraft accidents and natural catastrophes in Asia and the Americas. In spite of this, Club Méditerranée has maintained its existing positions, and has even strengthened its standing in France, its main market. Overall, the policy of winning back clients by changing the Village mix, implementing dynamic distribution and introducing more refined products and services produced its first positive results during the year, with a rise of 5.3% in revenue per hotel day in Europe, despite reduced capacity. The openings of Marrakech La Palmeraie and the Riad in Morocco, and two 4- and 3-Trident Villages at Val d’Isère and Méribel in France compensated for the closing down of five 2-Trident mountain Villages, and achieved the decisive turn of bringing European resorts up to the level expected by demanding international clients. In summer 2005, the number of clients in the zone rose for the first time in five years. The arrival of a new type of client attracted by our new positioning more than compensated for the number of lapsed clients. The brand relaunch was accompanied in all Villages by a significant effort to improve the quality of services and accommodation. The Club Med Passworld service was tested successfully in the Djerba la Méridiana, Yasmina and Les Almadies Villages. Club Med Baby Welcome will be introduced in all Family Villages in the summer 2006 season. Comfort à la carte is being introduced gradually as new Villages are built and existing ones renovated. Opened at the beginning of 2005, the highly-successful Marrakech la Medina was the first Village to feature Comfort à la carte, and has registered significantly higher client satisfaction scores.
32
Annual report 2005
Asia: a successful move upscale despite everything The Asian tourism market suffered very badly from the aftermath of the Tsunami of December 26, 2004, which resulted in a marked reluctance amongst local tourists to visit the coast and a dramatic reduction in bookings by western tourists. The trend had reversed by the end of Quarter 3, as western visitors returned to Asian destinations. In this context, Club Méditerranée demonstrated excellent resilience and used the time to implement actions necessary to the move upscale and to rebuild two of the three Villages affected, two of which were flagship
2005: 11 Villages upgraded to new standards Reopened in December 2004: – Coral Beach: renovated to 3-Trident standard; – Val d’Isère: renovated to 4-Trident standard; – Chamonix Mont-Blanc: renovated to 4-Trident standard. Reopened in June 2005: Otranto: renovated to 3-Trident standard. Reopened in November 2005: Agadir: renovated to 3-Trident Family standard, 76 junior suites created. Opened in December 2005: Peisey-Vallandry: built to 4-Trident Family standard. Reopened in December 2005: – Les Boucaniers: rebuilt from 2- to 4-Trident standard; – Kani: renovated to 4-Trident standard; – Cervinia: renovated to 4-Trident standard; – Aime la Plage: renovated to 3-Trident standard. Reopening in spring 2006: Hammamet: renovated to 3-Trident standard.
destinations accounting for 30% of the zone’s business: Phuket in Thailand and Kani in The Maldives. These reconstruction projects provided an opportunity to apply the new Club Med standards, with increased capacity in Suites and Deluxe rooms and more refined services. Kani will reopen in the first half of 2006, whilst Phuket was reopened very quickly in September 2005 and, since the beginning of the season, has seen significantly higher bookings than in the same period in 2004 (before the Tsunami), with 42% more bookings in November and over 18% more in December. Operational since the end of 2004 in most Villages, the upmarket move was completed during this period. All Villages now offer Comfort à la carte and Bar & Snacking included option, both of which will become part of the standard product for summer 2006.
The year was marked by the general introduction of the new offer in all Villages, with particular emphasis on renovated destinations. All Villages applied the Total All Inclusive package (including bar and activities), with selected Villages offering Comfort à la carte. Suites with bar, flat screen TV and room service, modeled on the Riad in Marrakech, were introduced at Columbus Isle in The Bahamas. Fitness services have been made more professional and transformed into Crunch Fitness Centers, offering Yoga, Pilates and Kickboxing classes led by qualified instructors. More sports have also been added. One of the showcases for this initiative is Punta Cana in the Dominican Republic. Ravaged by a hurricane and reopened in December 2004, it was the first Village to introduce teenager-specific entertainment. A New York designer was also consulted on matters of refined table setting and varied menus. Another high-profile village, Crested Butte in Colorado, has been exploiting its status as the first and only Total All Inclusive mountain hotel in North America, where the cost of the vacation includes ski passes, ski lessons, children’s clubs and Bar & Snacking included.
Club Med has developed upscale solutions that effectively address its core target markets: high-income short-stay family clients, most of whom are Asian, and in Kani, honeymoon couples with no children – some of them from the west. New prestige packages, such as Suite dream and Clubpremium, combine Deluxe rooms and Suites with special services, such as business class travel, personal welcome and private transfers between the airport and the Village.
Club Med 2, the most refined of discovery cruises
Americas: new strengths to reconquer the West
At 187 meters long, and with 1,750 m2 of open-air decks,
Club Med’s recovery in the Americas continues alongside deployment of the new strategy, which, in addition to the move upscale, involves adapting hotel and leisure services to meet the standards expected by the American public. An advertising campaign to promote short stays and a press relations campaign targeting upscale media have relaunched the zone’s destinations to American and Canadian clients. Crested Butte, Columbus Isle, the reopening of Punta Cana and Sandpiper and the renovation of Les Boucaniers were the particular focus for media exposure.
Club Med 2 is the most beautiful 5-masted vessel in the world. Its 200 crewmembers provide 392 passengers with unrivalled upmarket service that illustrates the sophistication of Club Med. The Bar & Snacking included option and longer mealtimes were just two of the innovations introduced in 2005 to make the atmosphere even friendlier; others included new features focusing on feng shui and tea. Six Mediterranean itineraries are planned for 2006, including new destinations and two new cruises with stopovers in Libya. “Joyaux de l’Adriatique” cruises are offering four new itineraries.
33
Group business activity
Other Group business activities Jet tours: strong growth in operating income Jet tours is France’s leading tour operator, and generated revenue of €304 million in 2005 (including €15 million of revenue originating in the Group), representing an increase of 8.5% over 2004. Combined with higher margins, this growth generated an operating income of €5 million, compared with €2.8 million in 2004. The number of clients remained static at around 282,000. These excellent results were achieved in spite of difficult market conditions and confirm the positioning of Jet tours, which has been offering its clients a more upscale range of products and services since 2001. Its range now includes some truly innovative services designed to deliver a long-term response to client expectations of a unique vacation experience.
A year of innovation In 2005, Jet tours continued to enhance its range of products and services with new concepts that set it distinctly apart from its competitors. UNESCO-branded tours Dating back to 1999, the partnership between Jet tours and the UNESCO resulted in Jet tours making donations to the World Heritage Fund and in all visited sites being quoted in the Tours brochure.
A new style for Jet tours Having introduced a new sophistication in its visuals and brochures, the brand is asserting its upscale repositioning with a new logo in which plum and fuchsia replace red and yellow, and a ribbon replaces the sun and moon. Simultaneously symbolizing connections and gifts, the ribbon expresses the Jet tours promise: a commitment to unforgettable vacations.
34
Annual report 2005
Jet tours and the UNESCO World Heritage program extended their partnership in 2005 to promote sustainable tourism and contribute to World Heritage protection. This exclusive 3-year agreement is a first at international level. Jet tours is extending its support for UNESCO initiatives, whilst the Organization is assisting in the creation of 12 Jet tours/UNESCO World Heritage joint-branded tours. In this respect, the UNESCO will accompany Jet tours clients at every stage of their travel. This range will soon be supplemented by tours developed jointly by the partners with visits to exceptional sites made available for Jet tours clients. A new Eldorador concept: personalized club vacations 2005 also marked the rebirth of Eldorador Club Hotels, whose new concept has been warmly welcomed by clients: “Club hotels à la carte”, for “Vacations for all, but especially for you”. In addition to its Club Hotel range, Eldorador is giving its clients the opportunity to tailor their own vacations with a series of options that are bookable in France, including Discovery (combined holidays, excursions, etc.), Wellbeing (Spa, thalassotherapy, etc.) and Energy (sports courses and team sports). A new segmentation scheme makes it easier for clients to choose the hotel best suited to their needs. The latest Eldorador hotel, the Lakopetra Beach in Greece, opened in May 2005 in the Discovery segment. Jet tours Secrets achieves its target Jet tours launched its Jet tours Secrets luxury travel brand at the start of 2005. Just one year later, the target has been achieved: Secrets has become THE symbol of the new luxury travel world, with nearly 1,000 clients, representing an average spending per person of €3,000 and giving rise to over 200 press write-ups.
Club Med World Opened in June 2000, Club Med World offers a completely new concept in entertainment and leisure. Just ten minutes form central Paris, its Bercy location has been designed to fulfil the widest possible spectrum of client desires, and includes a store, children’s activities (workshops, flying trapeze, etc.), two restaurants (traditional and Spanish), three bars, communal spaces for shows and concerts, and a disco. Club Med World also devise dedicated products (events, results presentations, seminars, evening events, etc.) for companies – a market that is becoming a priority target. In 2005, the site welcomed over 250,000 clients to its various facilities.
Club Med Gym: an increasingly powerful concept Club Med Gym continued to build its business in Paris during 2005, reporting higher revenue and operating income. In line with Club Méditerranée strategy, Club Med Gym is focusing on improving its service, particularly in terms of welcome, sports instruction and facilities. Thus, a number of tools have been introduced to monitor and measure the quality of welcome, including a quality questionnaire which is sent to every client two months after her/his joining. Sports instructors were proposed many training courses on team sports and on how to address the individual needs of clients.
The investment program designed to replace all the cardio-muscular training equipment is continuing alongside the club’s renovation program. At the same time, Club Med Gym launched an advertising campaign in the Paris metro to attract the attention of Parisians on the proximity of its facilities. Adapted for the radio and internet media, this campaign was supported by a series of punctual actions designed to get potential clients to come in and try the clubs and their facilities.
Stronger synergies The synergies with the Club Méditerranée Group were reinforced and extended to the Accor Group. In its training center (the IMF) and its 22 clubs, Club Med Gym is testing and validating new exercise concepts for groups, and others involving the use of fitness equipment, for future deployment in the Villages. In fact, seven Villages already have a Club Med Gym: La Palmeraie in Marrakech, Byssatis and Djerba la Fidèle in Tunisia, Kemer in Turkey, Otranto in Italy, Peisey-Vallandry in France and Les Boucaniers in Martinique. In 2005, Club Med Gym also developed turnkey fitness concepts (design, equipment and sports consultancy) for the Sofitel and Novotel chains. A product called “Sowellness fitness with Club Med Gym” has been introduced in three Sofitel hotels, and will be extended to ten others by the end of 2006. Novotel hotels in France will be introducing a “Côté fitness by Club Med Gym” concept in about twenty hotels, by the end of the year.
35
36
Annual report 2005
Sustainable development
A new organization is in the process of identifying challenges, setting targets and developing indicators that will provide a clearer framework and direction for sustainable development initiatives. Quality and safety are absolute priorities, and form the foundations of the trustbased relationship that connects the Group to its clients in the long-term. Human resources teams are working to develop the skills and employability of GOs and GEs, as well as seeking to offer them long-term careers within the Group. The communities that host our Villages are associated with the business, and benefit from local initiatives delivered by volunteer GOs and the Club Méditerranée Foundation. Conservation of the natural environment lies at the heart of a policy that aims at controlling the local impact of our business and raise client awareness of today’s major environmental challenges. 37
Sustainable development
A new organization to improve the way we address the challenges By adopting a value strategy as the only path to growth in a fast-changing tourism market, the Club Méditerranée Group is ensuring the long-term future of its business and securing the trust of its clients and shareholders. Protection and conservation of the natural environment and the effective economic and social integration of the Village into its surrounding region are also key considerations in the long-term success of a destination. Equally, in a service company like Club Med, the talent of its men and women and their ability to communicate are all part of the product. Their personal fulfillment depends on the quality of the service supplied, the loyalty of clients and therefore the effective operation of the business model. Lastly, if the new clients targeted by the Group like comfort and refinement, they will also be open to meeting others and discovering new places and things. These clients are aware of the impact of tourism on the environment and are therefore keen to see evidence of “good conduct” by operators.
A new Sustainable Development Department In 2004, the Group set up a joint organization devoted to sustainable development, and adopted an approach based on key stakeholder families: clients, staff members, local communities, suppliers and the environment bodies. A Sustainable Development Department was established in March 2005 with an efficient structure and a mission to bring together the initiatives and approaches of all the other departments concerned. One of its first projects was to draft a clearer definition of the Group’s key sustainable development challenges.
Club Med has always seen economic development as being inseparable from social and environmental responsibility. This is the basis of the Group’s sustainable development policy.
Commitments for 2006: to convert challenges into targets and set progress indicators for each commitment G Raise staff members’ awareness. 38
Annual report 2005
The challenges To guarantee clients
To ensure that shareholders receive
A high level of quality A high level of safety
Transparent financial information Effective corporate governance
To associate our suppliers with our values and ethics
To conserve the environment in and around our Villages Through impact and integration surveys Through the environmental quality of our buildings Through the control of our water consumption Through energy savings Through waste management Through the training of our teams on environmental issues Through client awareness initiatives Through reporting and an environmental management system
Through awareness encouragement Through fair trade Through an ethical purchasing policy
To supply our host communities with
A contribution to local economic development Solidarity projects Respect for the host country
To offer our staff members Respectful working conditions Increased employability Non-discriminatory practices An open attitude to voluntary initiatives
39
Clients
Quality and safety: the building blocks for long-term trust An expectation of quality that increases as we move upscale As a guarantee of loyalty and the evidence of the suitability of our products and services we supply, client satisfaction is closely monitored, and the resulting data fed into a regularly updated and developed measurement tool.
Enhancing quality standards The Group developed and implemented a set of quality standards some years ago, and these are now being enhanced alongside the move upscale. Formalized as manuals for each job and job category, these standards form the basis of the services Villages must provide under the contract we have with our clients, and set out the Club Med brand values and features that must be expressed consistently worldwide. Quali Signs: created in 2000, they encompass the quality standards in terms of services, skills and attitudes. For each job, they list everything that clients should see and experience at Club Med. They are prepared and updated every season with the active involvement of GOs, 600 of whom helped drafting them in the first place. Pro Signs: created in 2004 and deployed in 2005, these set out the procedures and methods used by GOs and GEs to deliver the services defined by the Quali Signs. Over 110 Club Med job and job categories were covered in 2005, with the relevant Pro Signs were issued in July.
40
Annual report 2005
Increased monitoring A number of tools are used to monitor Quali Signs compliance: GM feedback is the questionnaire sent by post or e-mailed to clients after their vacation. This tool is printed in 9 languages. New sections were added in 2005 to reflect the new Club Med challenges. In 2005, 39% of the 410,000 questionnaires issued were completed and returned. Containing around 100 questions, GM feedback provides a very rich source of monitoring, progress and internal benchmark, whose results are analyzed and applied to the daily management of our Villages. A monitoring system that scores and analyzes quotes extracted from client questionnaires and letters. Mystery guests are regularly sent to Villages to evaluate the effective application of Quali Signs. The Europe-Africa Quality Control Department, established in 2005, provides reactive support and management of Quality standards in the Villages of this region. It also ensures, from the beginning of the season, that the right conditions are in place for Villages to succeed by diagnosing any discrepancies between the expectations of GMs and the service actually delivered.
A reference in terms of safety As part of ensuring the safety of its clients, staff members and property, Club Méditerranée operates a 24/7 365day a year monitoring and crisis management system manned by experienced and highly-trained operators. Its Sensitive Situation and Crisis Management Manual is
cited as an example by experts and the French ministries of Foreign Affairs, Tourism and Health.
60 doctors at work in our Villages
Quali Signs and Pro Signs also incorporate safety standards specific to construction and operations.
60 general practitioners, specialists and hospital staff to work
Health and Safety in our Villages: two of the company’s daily priorities
ducted 69 audits (in food hygiene, health and safety with
Health and safety are covered by a specific and exhaustive policy, which includes: – a health and safety awareness video viewed by all GOs and GEs at the beginning of each season, – monthly health and safety meetings held to analyze 17 self-checking indicators (in French and English) and identify any remedial action required, – a network of medical officers of health.
activities), gave training sessions and provided company med-
Four special training and awareness modules were proposed to volunteer GOs and GEs in 2005: – AIDS prevention: 400 participants in 6 Villages; – Life saving: 212 qualified staff in 69 Villages; – Crisis management and communication: 80 participants; – Health, Safety and Hygiene: 50 participants.
At the start of each season, Club Med brings in a pool of in its Villages. In 2005, these healthcare professionals conrespect to the premises and the entertainment and sports ical services. The doctors meet twice a year to work together on selected topics (such as HACCP, Legionnaires’ disease, etc.), to learn about the new resources available to the Club Med teams and study the results of missions from the previous season.
Commitment for 2006: a Drug Prevention module designed in cooperation with the Association Nationale des Intervenants en Toxicomanie (the French National Association of Drug Abuse Caregivers) to raise awareness of drug-related issues amongst GOs and GEs.
Safety in the wake of the Tsunami On December 26, 2004, the Villages of Phuket in Thailand
resistant concrete structures have been built for boardings and plat-
and Kani and Faru in The Maldives were hit by a devastat-
forms, and lagoon bungalows have been equipped with lifejackets,
ing Tsunami. The crisis management team sprang into
torches, whistles and inflatable life rafts. Other decisions included the
action immediately, arranging for the rapid repatriation of
installation of powerful sirens in “Sun” Villages, the introduction of
1,250 clients and 250 GOs. After the crisis period had
public address systems in all Villages, the addition of “GM mobile
passed, an appraisal of the experience resulted in the
number” and “Person to contact in case of emergency” sections in
implementation of safety improvements in several Villages:
client registration forms and the introduction of additional volunteer
at Kani, the boardings and bungalows built over the lagoon
Crisis Support Teams in sensitive areas, such as airports and call
have been raised by one meter; earthquake- and hurricane-
centers.
41
Clients
Rigorous health provisions
Vigilant transportation management
Club Méditerranée has its own Scientific Committee, which is there to provide immediate expert advice on food hygiene, infection, tropical diseases and accident treatment issues.
The Group pays very close attention to air transportation safety, and commissions reputable independent technical inspection bureaus to conduct regular audits in cooperation with airlines. These audits examine key issues, such as organization procedures, training, quality, aircraft and maintenance.
Some Villages have their own nurses and/or doctors. The location of these professionals depends on the local medical infrastructure and the Village profile, with emphasis on those offering diving, Baby Club Med and Petit Club Med facilities. Clients are informed and advised about the health formalities of each Village via the Trident and the sales networks.
Managing avian influenza As part of managing the risk of avian influenza, the Health, Safety and
sion of the illness is confirmed within a community, even if
Hygiene Department has direct contact with the Head of the French
the affected location is remote from our Villages or tour
Interdepartmental Office on Avian Influenza and has increased its
itineraries.
permanent monitoring program in conjunction with the Group. The
– Informing the embassies and consulates of the number
immediate measures already taken include:
of GMs and GOs present in their countries to ensure that
– Distribution within the Group of the precautionary measures to be
instructions will be given to them, that they will appear on
taken. Currently applied in Asia and Turkey, they provide for:
the relevant lists and benefit from any measures imple-
– the cancellation of all visits to farms, zoos and markets involving
mented, such as the provision of masks, Tamiflu vaccine
poultry and other birds,
and medical assistance. This measure also aims to provide
– the sourcing of poultry exclusively from countries not listed by the
better information about the capacity to evacuate Villages
WHO as being at risk, the issuing of instructions for the preparation
or tours.
and cooking of certain sensitive products (pork, chickens, eggs,
– Identifying hotels available for use as quarantine centers
etc.) and the introduction of special kitchen hygiene measures.
by those returning from countries affected by the pan-
– Storage of appropriate masks in the Asian Villages concerned.
demic.
These masks have also been ordered for our Villages in Turkey. Other
– Making head office staff aware of the consequences that
special precautions are planned in order to cope with the situation as
could result from the appearance of the pandemic in
it develops.
France (opting out, enforced absence, working from home,
– Provisions to facilitate the fastest possible repatriation by air of all
cessation of meetings, vital attendance, etc.).
non-resident clients and GOs as soon as human-to-human transmis-
42
Annual report 2005
Staff members
Developing talent In 2004, at the same time as adopting its policy to move upscale, the Club Méditerranée Group set its Human Resources Department a series of new targets: to reward performance, develop skills and encourage career progression, whilst continuing to ensure decent working conditions and develop non-discriminatory practices. The aim of this management policy, which focuses on the wellbeing and career development of staff members, is to secure loyalty and motivation, both of which are fundamental to the success of the Club Méditerranée concept.
Reorganization of Human Resources As a driving force in the successful implementation of the new strategy, the Human Resources Department undertook a far-reaching reorganization of its structure in 2005 to help it fulfil its new missions of creating the right conditions for change and supporting that change. Started in 2004 with the launch of the “Cap sur l’incomparable” corporate project, the first stage ended at the start of the year with the definition of the Group’s fundamental values, which were chosen by the Executive Committee from about a hundred proposals gathered from the results of a “Club Med of Tomorrow” survey conducted amongst 3,000 GOs. The values adopted at the start of 2005 are all designed to unite the players central to Group development (management, GOs and GEs) and are gradually being absorbed into all internal decision-making and organizational processes. The process of change was also structured into five major cross-disciplinary projects coordinated by managers from a variety of backgrounds, including sales and marketing, products, Village structure development, GOs and GEs and management principles.
Once the new policy directions had been incorporated and shared by the teams, the Human Resources Department was restructured in such a way as to respond more effectively to the needs of the Villages. That new organizational structure has been operational since January 2006. The Human Resources Department Worldwide responsible for directing general and strategic missions now contains the new “Key Resources” and “Talent Development” groups introduced to focus on the career paths of GOs within the Group. A “Jobs” group in each zone has responsibility for managing job development initiatives designed to anticipate the needs of Villages. It is also in charge of assigning and trainings these GOs. The rise in recruitment in 2005 illustrates the commitment given to improving Village services by increasing the number of seasonal GOs and ensuring job security by issuing a significantly higher number of open-ended employment contracts. No redundancies were made for economic reasons in 2005.
Employment at Club Med Making over 3,700 appointments per year in France and Northern Europe, Club Med is one of the largest recruiters in the French jobs market, and the largest in terms of seasonal employment. Club Med employs a total of 18,550 staff members worldwide in its Villages and regional offices. Whether they are GOs, GEs, seasonal or permanent, Club Med offers all its staff members an original way of experiencing life and improving their employability by helping them to progress in an international environment, whilst working with clients and co-workers from many different countries.
43
Staff members
Employment data The employment and company data published in this report all apply to Club Méditerranée SA in France (including GOs France assigned outside France) for the period 01.11.04 to 31.10.05 (unless specified otherwise). At the peak of high season, these staff members represented 25% of our total workforce worldwide, and over 50% of permanent staff members worldwide. Table 1 – Evolution of workforce figures and the economic impact on employment Indicators
November 2003 to October 2004
November 2004 to October 2005
Average CMSA workforce and GOs assigned outside France
3,789
3,896
Breakdown by employment type Head office staff Head office executives Permanent Village staff Seasonal staff Service staff (GEs) Village executives
441 495 547 1,536 652 118
446 510 487 1,664 666 123
51 30 21
88 50 38
10,103 3 7,638 2,462
10,644 10 8,126 2,508
9 4 5 0
0 0 0 0
216 23 129 64
250 26 151 73
79 40 39
91 52 39
Number of staff members recruited on open-ended contracts Executives Staff Number of staff members recruited on fixed-term contracts Executives Staff Service staff Economic redundancies* Executives Staff Service staff Redundancies for other reasons* Executives Staff Service staff Non-Company labor* IT service providers Temporary staff (full-time equivalent)
* The redundancy and external labor figures for 2004 relate to the calendar year and are therefore indicative only.
Subcontracting Subcontracted activities (€ million)
Accommodation Laundry Childcare and safety Ski school IT Services Logistics
44
Annual report 2005
2004
2005
Sites
4 3 2 10 4 1
4.5 3.5 2 10.5 5 0
9 Villages in France All Villages in France All Villages in France All winter Villages Paris and Lyon head offices Paris and Lyon head offices
Management challenges and principles For change to be brought about successfully, managers must be able to address all challenges simultaneously and interpret them effectively in a way that motivates GOs and GEs. New appraisals have been introduced to help executives improve their managerial abilities in line with corporate values, particularly at key management time, such as appraisal meetings and recruitment interviews.
Table 2 –
Salaries
Indicator in € million
Personnel costs
2004
2005
133
139
The rise in payroll costs is due essentially to the increase in the total compensation paid to head office executives (+5%) and the employees of Villages outside France (+11.6%).
Developing skills and encouraging career development
360° appraisal (a meeting to discuss managerial qualities as perceived by managers and staff members) was introduced in 2005 for the top 50 managers at Club Med, and will be extended to all managers during 2006. People Reviews (meetings between managers and Human Resources Departments to discuss team potential) have been introduced for sales and operational staff.
The Human Resources objectives defined in 2005 aim to improve the methods used to identify, hire and manage the most talented staff members. Supported by training programs, the number of career gateways between jobs and geographic locations are increasing all the time, improving the opportunity of all staff members to progress within the company.
The compensation policy (table 2) applied by Club Méditerranée is built on the principles of fairness and rewarding personal performance. The performance appraisal process applies to all GOs and GEs, and is based on evaluating the skills previously defined for all staff members, and monitoring the individual targets set for office-based GOs and Village managers. This process involves a series of interviews between the GO or GE and his/her manager. This appraisal forms the basis for salary reviews and/or promotion.
The systematic introduction of appraisals (table 3) for GOs and GEs continued in 2005. The great majority of staff members, including seasonal workers and local GEs, attended appraisal meetings giving them the opportunity to measure their skills in relation to the needs of the company, set their own career development targets and, for some of them, to be offered professionalization courses.
Fairness is ensured by maintaining a consistent relationship between salary levels and levels of responsibility.
Table 3 –
Appraisals conducted in 2005 Villages
Number of appraisals conducted 24,332 Percentage of jobs appraised
75%
Offices, head offices and agencies
2,563 83%
Between 2004 and 2005, the Village GO and GE appraisal rate remained stable at 75%, whilst the rate for offices, head offices and agencies rose from 80% to 83%.
Commitment for 2006: appraisal meetings will focus more on staff member career development and will be renamed as “Appraisal and Career Development Meetings”.
45
Staff members
Training and professionalization initiatives (table 4) have been increased. 13,487 trainees attended Club Med Schools and Club Med University this year. Their task consists in supporting phase 1 of the upmarket strategy by developing the skills of Village GO and GE teams (by implementing local training initiatives) and training all sales teams. A new module directly linked to the move upscale has been introduced by Club Med University and implemented in 60 Villages worldwide. The introduction in 2000 of the “Validation des Acquis de l’Expérience” (validation of Acquired Experience) process resulted in 200 staff members being award diplomas ranging from CAP (French vocational training certificate) to DESS (post-graduate degree). This approach motivates GOs because gaining qualifications improves their employability, and therefore their prospects of promotion.
Training courses worldwide in 2005
Table 4 –
01.01.05 to 31.12.05
Number of trainees Club Med University Club Med Schools – Europe and sales Europe – Asia – Americas* Average number of training hours (in sessions of at least 2 hours) per trainee, per year – Club Med University – Club Med Schools Europe and sales Europe – Asia – Americas
2,548 4,615 1,442 4,882
Annual report 2005
Non-EC staff members working in France
Table 5 –
(within the framework of agreement* signed in April 2004 with the international trade unions UITA and EFAT). Winter
Summer
78 Moroccan staff members 28 Tunisian staff members 100 Turkish staff members
45 Moroccan staff members
* Agreement to conform to the fundamental employment rights and international mobility development prospects of service staff. – UITA: International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers' Associations. – EFAT: European Federation of Trade Unions in the Food, Agriculture and Tourism Sectors and Allied Branches.
Table 6 –
Mobility indicators 2005
20 h 18 h 13.5 h 8h
* The figure for the Americas includes training sessions of less than 2 hours involving 1,768 GOs and GEs.
46
Internal mobility (tables 5 and 6) is being managed by a dedicated team using the Hélios system since 2005. This database lists the skills of individual GOs, making it easier to monitor their careers and optimize the way they are allocated. Club Med proposes 250 different jobs in 28 departments and 15 job categories (Mini Club, Boutique, Bar, Healthcare, Catering supplies, etc.). Club Med also provides career gateways to Club Med Gym and the Accor hotel group as part of the synergies structured between the two groups: 20 or so career moves were made between Club Med and Accor in 2005. The Group can thus offer geographic mobility prospects that extend to over 4,000 locations.
GOs and GEs changing Village job category
8.3%
GOs working in a country other than their country of origin
48%
GEs working in a country other than their country of origin
10%
8.3% of GOs and GEs changed job category in 2005. Changes of job within the same job category are much more common.
Fighting against discrimination: one commitment… many initiatives Throughout its history, Club Med favored non-discrimination in its hiring, career management and compensations policies (tables 7 and 8). The difference between men and women’s salaries therefore remained unchanged for head office/office executives and permanent Village staff members. Relative pay levels have risen for female head office and office staff and have increased slightly for Village executives and seasonal staff. All categories of staff members (men and women) were granted basic salary increases between 2.5% and 28%. In 2005, Club Méditerranée committed itself to take part in the Averroes project initiated by the European Social Fund as part of the Equal program set up to fight labor market inequality and discrimination through transnational cooperation. The Averroes project takes an integrated approach to the prevention and correction of discrimination on the grounds of gender or origin with respect to hiring and career evolution. A project focusing on the integration and supervision of disabled staff members was launched in 2005, the first results of which expected in 2006. Multiculturality is a daily reality in our Villages: on August 31, 2005, 96 nationalities were represented in the GO and GE teams working in the 66 Villages open at that time. Percentage of Villages with teams made up of men and women of
7 nationalities or more 15 nationalities or more
84% 31%
Table 7 –
Compensation - Men/Women
(Basic average salary of CMSA GOs working between November 1 to October 31 – exc. executive committee) 31.10.04 Men Women
Average gross monthly salary (€)
Head office and office executives Head office and office staff Village executives Permanent Village staff Seasonal Village staff Service staff
3,751 1,829 2,427 1,467 1,274 1,270
3,093 1,687 2,257 1,360 1,271 1,284
31.10.05 Men Women
3,892 1,872 3,011 1,848 1,350 1,341
3,213 1,736 2,745 1,739 1,340 1,357
Employment and integration of disabled staff members
Table 8 –
Indicator
Number of disabled staff members Amount paid to AGEFIPH (€000)
2004
2005
20 418
25 396
Ensuring decent working conditions Acting in accordance with the principles laid down by the International Labour Organization (ILO) Conventions, Club Méditerranée is committed to: – respecting the rights of staff members to form unions and/or join a union of their choice in accordance with national legislation, – avoiding the use of methods designed to discourage union membership, – ensuring that elected or appointed union representatives are not subject to any form of discrimination as a result of their union affiliation or activities, – permitting union representatives to contact Club Méditerranée staff members under the conditions provided for under national and/or local laws, collective agreements and practices, – tolerating no form of forced or obligatory labor as a measure of coercion or sanction in respect of people expressing political opinions,
47
Staff members
– respecting the effective abolition of child labor, – respecting the principle of equality of opportunity and treatment in employment, – ensuring that the principle of salary equality for men and women carrying out work of equal value is applied to all staff members (tables 9 and 10).
Respecting personal circumstances through part-time working Part-time contracts are proposed in response to requests made by individuals at particular times in their lives (parental vacation leave, medical treatment, therapy, etc.). The number of part-time contracts issued has remained stable for several years. In most cases, these contracts are issued to female staff working in Club Med Voyages agencies. Part-time staff members: approximately 60* permanent GOs in France are employed under this type of contract. Most are female staff working in Club Med Voyages agencies.
Working time regulation: the 35-hour week
The time off accumulated in this way entitles the staff members to approximately 3 days’ leave per season. These provisions were supplemented by a night working agreement in July 2002. Overtime is compensated for by time off in lieu for both head office and Village staff. Excess hours worked in the Paris and Lyon head offices are insignificant. 7 summer Villages accumulated a total of 3,260 hours (including RCR) worked in excess of 39 hours per week and not reclaimed during the season; the figure for 15 winter Villages was 3,926 hours (including RCR). This increase over 2004 (approximately 3,000 hours) is explained by the introduction of an improved working hours monitoring system in all Club Méditerranée Villages. Working hours organization Average weekly hours
2005
Paris and Lyon head offices Travel agencies French Villages
35 h 35 h 39 h
The Paris and Lyon head offices and the travel agencies are covered by a 35-hour working week agreement since 1999. The Paris and Lyon head offices work a 371/2 hour week, with 12 days of RTT (working time reduction) and 2 extra long week end days per year.
Table 9 – (January 1 to December 31, 2005)
* during the 12 months to 31/12/05. ** RCR: Repos Compensateur de Remplacement (compensatory time off in lieu).
Number of lost-time injuries in CMSA Villages Staff and executives (GO) Service staff (GE)
AIDS Prevention Initiative Working in partnership with the Club Méditerranée Foundation and the French organization AIDES, the Health, Safety and Hygiene Department is organizing prevention initiatives for local Village staff. In summer 2005, 400 GOs and GEs in 6 Villages attended meetings during which an interactive AIDS prevention module was presented.
48
GOs and GEs working in French Villages receive time off in lieu for time worked between 35 and 39 hours per week.
Annual report 2005
Health and Safety Conditions 2004
2005
341 204 137
346 225 121
In 2005, the number of lost-time injuries remains unchanged compared to 2004. Most accidents concerned the catering (which accounted for nearly half), accommodation and kitchen (which accounted for nearly one quarter each) job categories. This proportional division was reflected in the number of days absent, 41%, 30% and 21% respectively.
Table 10 –
Absence
(January 1 to December 31, 2005) Absence by reason in number days
Illness
Accident in the workplace
Maternity leave
Paternity leave
Absence to care for sick children
Total
Executives Staff Service staff
3,719 12,213 3,996
191 5,158 1,160
1,833 3,237 214
77 44 0
44 84 0
5,864 20,736 5,370
Total
19,928
6,509
5,284
121
128
31,970
Absence increased in 2005 compared to 2004. For the most part, this increase can be explained by the higher number of days absent due to illness and maternity leave (+15% across the 2 items).
Labor relations policy The launch and implementation of the “Cap sur l’incomparable” corporate project was supported throughout by an ongoing dialogue between the company and staff member representatives, which proved constructive and motivating for staff members involved in the move upscale. In 2005, CMSA renegotiated its staff provident schemes to maintain the level of benefits without increasing the cost of contributions.
Agreements July 8, 2005: signature by the Fédération des Services CFDT, the CFTC and CGT of an additional clause to the June 30, 1983 agreement on staff member representation and union organizations. June 17, 2005: signature by the Fédération des Services CFDT, the CFE-CGC, the UNSA and FO of a wages agreement for Village staff members. December 30, 2005: – signature by the Fédération des Services CFDT, the CFTC, FO, the CFE-CGC an the UNSA of a company agreement of unlimited duration instituting a system of collective Death, Incapacity and Invalidity cover for supervisors,
– signature by the Fédération des Services CFDT, the CFTC, FO, the CFE-CGC the UNSA of a company agreement of unlimited duration instituting a system of collective Medical Expenses Refund cover for supervisors, – signature by the Fédération des Services CFDT, the CFTC, FO and the UNSA of an additional clause (covering executive and non-executive staff) to the December 16, 2003 company agreement on the introduction of the binding agreement and provision of eyesight and dental cover, – signature by the Fédération des Services CFDT, the CFTC, FO, the CFE-CGC and the UNSA of an additional clause (covering executive and non-executive staff) to the December 16, 2003 company agreement on the lowering of provident rates.
Social report The social report is compiled each year, in accordance with French law and involves the Works Council. Then, it is forwarded to the Labor Inspection authority. It covers all CMSA staff members registered with the French social security system (whether employed in France or assigned abroad). The 2005 social report showed 4,302 staff members, including 642 executive staff, 2,599 employees and 1,061 service staff (at 31.12.05).
49
Host communities
Villages involved in local development Wherever it is located, Club Méditerranée generates direct and indirect employment and additional economic activity. The Group aims at injecting long-term vigor into its host regions by applying a proactive policy of professionalizing local staff members, promoting respectful tourism and involving its staff members in local support initiatives.
Contributing to local economic growth Professionalizing local staff members GEs represent 60% of Village staff. Most live near the Village and are employed in the hotel, maintenance and catering job categories. Club Méditerranée implements a range of schemes to encourage upskilling and increased employability. GE development
Appraisals Training Geographic mobility
2005
In percentage
12,475 2,147 1,325
71% of jobs 16.2% of GEs 10% of GEs
Proportion of local people employed in Villages At 31.08.05
Local jobs International jobs
%
73.3 26.7
Giving priority to local purchases The Group’s contribution to local development also involves purchases. In fact, most of the running cost spending of the Village running costs is done locally in the host country, and the majority of food products are purchased locally. Local suppliers are always invited to tender for the supply of non-perishable products.
Respecting host countries Local purchasing in 2005 In 2005, an average of 55%* of Village operational purchases were made in the host country. This rate is not linked to national development indices, and rises from 80% to 95% for food products (95% in Morocco, for example). * an understated estimate that takes account only of purchases made by the Village, and therefore excludes purchases made locally by the Country or Head Office Purchasing Department.
50
Annual report 2005
As a signatory to the Charte du Voyage (travel charter) and the Charte Nationale d’Ethique du Tourisme (national charter of ethical tourism), Club Méditerranée is developing Discovery packages that promote a respectful approach to different cultures and lifestyles. Jet tours also offers 12 tours of world heritage sites organized in partnership with UNESCO. Signed in 2005, this partnership agreement provides for tours of world heritage sites and their long-term conservation and protection. Under the agreement, Jet tours
The reopening of Les Boucaniers: a prime example of sustainable local involvement The reopening in December 2005 of Les Boucaniers
– As part of encouraging internal mobility and access to management
Village in Martinique was preceded by local initiatives
positions, employees were encouraged to take a Ministry of Labor
designed to ensure that local staff, traders and manufac-
qualification: 95% passed the exam.
turers would benefit as much as possible from the new
– The age pyramid was rebalanced with the retirement of 16 staff
birth of this wonderful destination. This project involved
members aged over 55 compensated by the hiring of 36 young
careful consideration of the local economic and social
employees under specific hiring conditions (emplois jeunes).
challenges, and resulted in the implementation of a plan to secure the maximum local involvement:
200 local jobs were provided, including 50 new posts for local staff. As part of the project, volunteer GOs organized English language
– The existing Village team was kept together and consol-
courses for economic agents in Sainte-Anne to help them benefit from
idated. The commitment to long-term employment was
the increased numbers of North American clients visiting the destina-
put into action with the conversion of 53 fixed-term con-
tion. An agreement is now being negotiated with local fishermen to
tracts into open-ended contracts, and the creation of
secure agreed quantities of fresh fish, and initiatives to encourage
career gateways between jobs.
local production of organic fruit and vegetables are being developed.
– All staff members received general training over an
The Village has also adopted local West Indian culture to a much
8-month period to enhance their expertise and encourage
larger degree, with the inclusion of a market and local craft work-
multiskilling. This course was then followed up by special
shop, a Spa offering massages with locally produced oils, and excur-
training in specific hotel jobs. A total of 143 staff members
sions to discover the natural world. With support from Club Med,
underwent adapted training.
Sainte-Anne is now presenting itself as an ecotourism destination.
makes an annual donation to the UNESCO World Heritage Fund to help with the restoration of sites, and supports the World Heritage Centre sustainable tourism program. Both partners agree to implement practical sustainable development initiatives within the next 3 years.
Club Med is working with ECPAT to help stamp out sex tourism involving children
In 2005, the Group agreed to support the campaign against sex tourism involving children. Coordinated by ECPAT, this campaign is sponsored by the French Ministry of Tourism.
tion mailed to all clients before departure.
This commitment is put into practice in the form of a letter and explanatory leaflet sent as part of the vacation informaThe same information is also clearly stated on banners displayed in the Group’s web sites. Information posters were tested in selected agencies during 2005, and will be deployed in all agencies in 2006.
51
Host communities
Lumières d’automne and Samu Social The Foundation is working alongside Samu Social and the Trace de Pas organization in their work to help people with no resources get back into society. During five week ends in the year, Foundation volunteers assist this group in the maintenance of the convent’s garden in La Souterraine (central France). Twenty volunteers from the call center in SaintOuen take it in turns to visit the retired residents of the Lumières d’automne retirement home on Thursday afternoons.
A corporate foundation and volunteer staff members Established in 1978, the Club Méditerranée Foundation is one of the first 10 foundations which started to operate under the aegis of the Fondation de France. It was awarded Corporate Foundation status in 2003.
An original mission – Encourage staff members to volunteer for ongoing or occasional social missions, which taket just a few hours up to 3 weeks of their time. – Support projects initiated by staff members. – Distribute recycled Club Méditerranée equipment to organizations which need it.
Local initiatives Involving offices and head offices: supported by the Foundation, clubs of volunteer staff members put Club Med’s entertainment expertise and its culture of friendliness to work in projects for underprivileged groups, (sick children, senior citizens, social inclusion, educational support). Involving Villages: three major types of initiatives are carried out with the Villages. – 3-year “Schooling” child education programs in Senegal (Les Almadies), Egypt (Luxor), Morocco (Marrakech) and Thailand (Phuket). – Events: the Goûter Planétaire event is held in 70 Villages at the end of June every year for 8,000 vulnerable children, and marks the beginning of the “Solidarity Season”. This first contact gives GOs the launch pad from which to initiate their microprojects for the season. In March each year, our French Villages hold a special charity day. In 2005, the funds raised were donated to the organization Les Petits Princes. On March 23, the GOs, GEs and GMs in 18 winter Villages organized races and a series of other entertainments to raise funds for this organization which helps severely ill children fulfil their dreams.
Social inclusion through sports in Senegal At Cap Skirring in Casamance, the Club Med Village welcomes children from the neighboring village of Kabrousse for regular tennis lessons during week ends and school holidays.
Commitment for 2006: two new education programs.
52
Annual report 2005
– Microprojects are initiated and supported by Village GOs and GEs to meet local needs, and include sales of local craft products and products with the signature of GOs, parties and entertainment for children in neighboring communities and sports-based inclusion projects using Village sports facilities.
The “Schooling” program concept
Encouraging voluntary solidarity and sponsorship: the Club Méditerranée Foundation has been a partner of Planète Urgence from the very beginning, and over 50 Group staff members have already supported this organization’s development projects in Africa. In 2005, 10 staff members made the journey to Mali to provide educational support and help set up a library. In the wake of the Asian Tsunami, the Foundation worked with the Accor Group under its partnership with the NGO Plan, which sponsors underprivileged children (table 1).
their family environment,
– children requiring educational support are identified in cooperation with local authorities, – each child is individually identified for the purpose of distributing educational kits and monitoring their progress in – in September, kits are distributed in Villages at a small party involving the whole team, – in June, children enjoy the Goûter Planétaire party, – between these two events, the Villages set up a series of support projects at their own initiative, including inviting local people to use the Village pool, organizing football matches with GOs, school events involving GMs and language lessons.
Global activity of the Club Méditerranée Foundation
Table 1 –
2003
2004
2005
Number of hours of voluntary work 34,731 37,621 72,737
A global community of volunteers 12% of head office and office staff members in France are involved in support initiatives. 5,600 GOs and GEs around the world helping in the organization of an international event in 70 Villages. 1,300 GOs and GEs working in 15 French Villages dedicate one day of their time to a charitable organization.
Commitment for 2006: improve the reporting of disparate support initiatives and assess their results. 53
Suppliers
Sharing values through information and dialogue Club Méditerranée works with 20,000 local, national and international suppliers worldwide. The Purchasing Department drafted its values in 2004, as part of the “Cap sur l’incomparable” project: Honesty, Integrity, Fairness, Ethics and Respect for confidentiality. In 2005, all Country Buyers and Product Family Buyers were made familiar with these values. The Club Méditerranée Purchasing Department also worked with the Accor Purchasing Department in France to develop sustainable purchasing policy guidelines based on:
– seeking to contribute effectively and fairly to local development through purchasing, – adapting the product policy, starting with wood, fabrics and paper. In 2006, the Purchasing Department will be working with suppliers to create more value by working more closely together on all price components to deliver greater savings. For example, Club Med will be working with airlines companies on action plans to address client needs in terms of flight comfort, meals and newspapers.
– long-term internal awareness of the issues and operational application of Purchasing Department values, – improving supplier awareness through distribution of a charter and questionnaire,
Since summer 2005, Max Havelaar fair trade tea is served in the bars of all French Villages.
The Purchasing Department’s 5 values Honesty outlaws the use of all illegal or underhand methods to
charter, specifications, a logistics charter, a copy of the
gather information about suppliers and denigrating supplier behavior
draft contract and, for some suppliers, a sustainable
or product/service quality in front of others. Suppliers are selected
development questionnaire. The sustainable purchasing
in a completely open way on the basis of objective criteria.
charter focuses on environmental protection and fair
Integrity means never allowing personal interests to interfere with
labor conditions (requiring compliance with conventions
business relationships. Buyers must not accept gifts other than
and fundamental employment principles, and non-
purely symbolic ones.
discrimination). All contracts include specific clauses gov-
Fairness means showing no favoritism or discrimination in respect of suppliers, and maintaining a minimum level of competition. Ethics – From 2006 onwards, suppliers will receive a number of documents along with offers to tender: the sustainable purchasing
54
Annual report 2005
erning child labor. Confidentiality – Buyers keep information made available to them during the course of their assignment confidential.
Environment
Controlling environmental impact and raising client awareness Working towards consolidated environmental reporting
The renovation of Les Boucaniers
Spring saw the introduction of an in-depth questionnaire containing over 500 questions designed to gather information about the practical environmental management actions taken by Villages and identify the key environmental parameters for each site.
ment of this fishing village, we decided to renovate it rather
The questionnaire was sent to the Villages open during the summer season (78% of all Villages), and generated a response rate of 97%.
technical services has been installed as part of controlling
Giving preference to environmentallyfriendly buildings Located in exceptional surroundings, Club Méditerranée Villages are designed to fit into the landscape and respect the natural environment. Where new Villages are planned, we conduct environmental impact studies and insist on strict compliance with all regulations, especially those relating to the protection of ecosystems and biodiversity.
In order to retain the identity, charm and natural environthan rebuild it, and were able to retain 90% of the existing facilities. The buildings here are open to the trade winds to provide natural ventilation. Centralized management of energy consumption, and the Village now has new rainwater and waste water drainage systems. The landscaping of the site involved: – the planting of 300 coconut palms to extend the coconut plantation up to the back walls of the buildings, – the conservation of all healthy coconut palms, – the replacement of 170 coconut palms with 250 royal palms, – the introduction of 10,000 m2 of local shrubs, – the planting of 20,000 m2 of rural lawn.
For its gardens, Club Med selects local plant species and always keeps the rarest types. Buildings occupy only a very small proportion of the total area of each Village: in 88% of our non-mountain Villages, the average “built surface/ total surface” ratio of the Village is 11 %*. * Source: environmental assessment 2005. The structural data refers to summer 2005, and some consumption data to summer 2004.
Commitments for 2006: repeat the assessment for mountain Villages open only in the winter G Identify the key indicators and draw up the specifications for a long-term reporting system.
55
Environment
Good environmental management practice as the basis for an integrated policy Ever since its creation, Club Méditerranée has taken practical action to ensure the preservation of the exceptional locations in which it operates, and to manage its consumption of water and energy as effectively as possible. On-site operational environmental management is provided by the Technical Department, which defines and implements the technical installation checking procedures and conducts regular Village audits. A dedicated Green Area Europe-Africa manager reports to this Department.
Managing water consumption As part of controlling its water consumption, the Group has, for many years, focused on saving water at source and recycling used water (tables 1 and 2). All Villages have devices to control day-to-day consumption.
Villages equipped with water saving systems, summer 2005
Table 1 –
Water saving equipment (%)
Pressure reducers Flow reducers Flush volume reducers Sprinkler programmers Drip irrigation systems Granule dishwashers
Europe Africa
Asia Pacific
Americas
World
66 84 61 72 66 10
63 63 63 63 63 13
56 78 44 56 33 0
62 80 60 67 61 11
Source: Information gathered from 64 Villages open in summer 2005.
Recycling: 70%* of Villages with wastewater treatment plants use recycled water to irrigate their gardens, and two of them also use it for WC flushing (so-called “grey” water). * Source: environmental assessment 2005. The structural data refers to summer 2005, and some consumption data to summer 2004.
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Annual report 2005
Water consumption in French Villages
Table 2 –
Water consumption in m
3
2003
2004
2005
774,651
700,269
683,077
Monitoring energy consumption Energy costs and consumption are permanently monitored, with control and reduction targets being set annually. Equipment and installations are regularly updated to obtain the best possible efficiency (table 3).
Energy consumption in French Villages
Table 3 –
Electricity consumption (MWh)
2003
2004
2005
53 ,694
52,846
51,749
Having installed Europe’s largest array of solar panels at Les Boucaniers in 1978, Club Med has always pioneered the use of solar power, and is now using another competitive alternative power source by heating water using heat recovered from air-conditioning and refrigeration plants. This method is systematically envisaged in new projects (table 4). In 2005, Club Méditerranée signed a contract with Compagnie Nationale du Rhône to supply power to 10 mountain Villages. This agreement guarantees that 25% of the power supplied is generated from renewable sources (hydroelectric or other).
Commitment for 2006: to conduct a carbon assessment on a typical Village.
Table 4 –
Alternative energy
Type of energy
350 metric tons of CO2 saved at Agadir
Number of Villages, summer 05
Solar heating Heat recovery from air-conditioning plants Heat recovery from refrigeration plants Heat pumps
The Agadir Village upgraded its solar heating installation as
8
part of the renovation works carried out in 2005. The project
16
was ambitious: 12 collectors were installed, covering 720 m2.
4 2
The storage volume necessitated the installation of three 10m3 reservoirs. The installation generates 720 MWh of power per year and prevents the emission of 350 metric
Waste reduction
tons of CO2 into the atmosphere. With the new system, the
Waste water: Villages in regions without effective waste water collection systems all have their own waste water treatment plants: this is the case with 40%* of summer Villages.
company will save €68,000 per year, meaning
Waste management: Club Méditerranée is committed to developing selective waste sorting in countries where suitable recycling facilities are available (table 5). Over half of all Villages recycle their waste, whether internally or externally.
Other types of waste: Club Méditerranée Villages generate no significant levels of atmospheric discharge. The installation of gas heating systems (cleaner than oil-fired installations) and energy consumption optimization measures are contributing to better air quality and the limiting of greenhouse gas emissions.
Table 5 –
Waste recycling
Type of waste
Glass Cardboard Metal tins and cans Plastic bottles Batteries IT consumables Fluorescent tubes Cooking fats “Special” waste Green waste (branches and leaves) Compostable food waste Other food waste
Percentage of Villages using recycling facilities where such facilities exist
that it will pay for itself within three years.
The use of fertilizers and soil improvement products on golf courses is carefully controlled on the basis of soil analyses and fertilization plans.
100 89 80 70 88 75 79 100 65 70 75 73
Commitments for 2006: to test a new ecological reed bed waste water treatment system on Mauritius G Research Survey on optimizing waste management in a typical Village at Opio.
57
Environment
The olive trees of Opio Perched high in the hills above Nice, Opio Village uses traditional methods to cultivate 5.5 hectares of olive groves – one of the last of its kind in the region. Every year, the Village produces 2,000 liters of delicious “cailletier” (the regional name for olive oil), which won a silver medal at last year’s
Targets imposed by the company on its foreign subsidiaries Club Méditerranée SA requires its foreign subsidiaries to apply the general policy of encouraging experience feedback and sharing good financial, environmental and employment practices. Club Méditerranée SA also ensures that its subsidiaries comply with local regulations.
Paris agricultural show. Clients are invited to visit the olive groves and press to discover the traditional and environmentally friendly methods used to manage the trees and produce the oil.
Prevention and compliance Preventing and managing environmental risks The technical facilities are checked periodically in order to prevent risks usually encountered in vacation villages. Given the absence of any significant environmental risk, Club Méditerranée has included no environmental provision or guarantee in its 2005 accounts.
Legal compliance
Raising client awareness of environmental issues An extended vacation in a beautiful and protected location provides an excellent opportunity for encouraging vacationers to appreciate and protect nature and the environment. The initiatives and activities proposed in Villages include botanical tours, plant labeling, nature protection conferences and guided summer hikes in mountain Villages, all of which are greatly appreciated by clients. Raising client awareness of the need to save water and energy is developing in most Villages: messages during the welcome conferences, notices in bathrooms, invitations to require fresh bathroom linen only when necessary.
In respect of the 2005 financial year, Club Méditerranée SA made no payment following any legal decision relating to environmental issues.
Coral garden in Bora Bora In the Aponapo bay of southern Bora Bora, the Village has a
underwater trail through the fauna and flora of the
boarding built over the fringing coral reef. In this area, water
bay. Without assistance, clients with masks and
is typically shallow and calm and a lot of seaweed lives on the
snorkels will be able to follow this 7-stage
sandy bottom, where dead coral can be found. After a detailed
trail and read laminated descriptions
study of the area and some initial experiments, the Village
along the way.
is now transplanting the coral and creating an educational
58
Annual report 2005
Management discussion and Analysis
59
Consultancy, conception, design, writing and production: Tel: + 33 1 56 21 20 13 Photos: Philippe Abergel, the Club Méditerranée photo library
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