Luxury resorts beckon for Fosun Tourism

China’s Fosun Tourism Group, which operates the Club Med holiday business, is seeing profit in its first year as a public company in Hong Kong as its resorts find favor with tourists.

The company — the tourism arm of Shanghai billionaire Guo Guangchang’s investment firm Fosun International — posted a net profit of 389 million yuan (US$58 million) for the 12 months up to December 2018, reversing a loss of 295 million yuan in 2017.

"The company is on track for a bumper year in 2019, riding high on the yet-to-be-tapped potential growth of China’s tourism industry"--Qian Jiannong, Fosun Tourism’s chairman, executive director and chief executive officer.

Fosun Tourism, which raised US$428 million in its initial public offering Hong Kong last December, said full-year profit attributable to shareholders reached 308 million yuan, or 0.31 yuan per share, compared with a loss of 197 million yuan in 2017. 

During the period, revenues surged 37.9 percent on year to 16.3 billion yuan.

Club Med remains the major cash cow for the company since Fosun International bought control of the Paris-based luxury holiday group for US$1.07 billion in 2015 after a two-year takeover battle, and steered the money-losing resort chain out of the red a year later.

Last year, Club Med contributed 77.6 percent of the company’s total revenue, down from 99.1 percent in 2017, underscoring Fosun Tourism’s quest to diversify its revenue sources.

One major bright spot is the Atlantis Sanya luxury resort, which made its debut in April last year in a US$1.74-billion bet to become a tourism icon in “China’s Hawaii” — the southern island province of Hainan.

Atlantis generated revenue of 752 million yuan in 2018, which pales in comparison to a staggering 150-million-yuan generated in just 16 days during the Lunar New Year period in February this year.

Qian Jiannong — Fosun Tourism’s chairman, executive director and chief executive officer — said the company is on track for a bumper year in 2019, riding high on the yet-to-be-tapped potential growth of China’s tourism industry.  

For years, the dizzying growth of the world’s second-largest economy has given birth to a new breed of “super consumers” who have now gone beyond mimicking the patterns of the more sophisticated Western shoppers to being trendsetters and innovators.

Such a big trend spells huge opportunities, and Fosun Tourism cannot afford to miss the boat, Qian said in Hong Kong on Monday.

The company is pressing ahead with two resort projects in Lijiang, Yunnan province and Taicang, Jiangsu province, whose combined investments are expected to far exceed 10 billion yuan, as part of its major efforts to consolidate its position as the world’s largest leisure tourism resort group by revenue.

Fosun Tourism’s share price dropped 2.12 percent to close at HK$15.66 on Monday. The benchmark Hang Seng Index climbed 1.37 percent, or 396.75 points, to close at 29,409.01 points.