Fosun Tourism Announces 2022 Annual Results Business Volume of Tourism Operations Markedly Increased by 85% YoY Business Volume and EBITDA of Club Med Return to Pre-pandemic Levels

Results Highlights:

• In 2022, Business Volume of the Group’s tourism operations increased 85% YoY relative to the same period last year. Adjusted EBITDA turned positive by a notable extent, up from RMB213million in 2021 to RMB2,345 million in 2022. Loss attributable to equity holders narrowed significantly from RMB2,719 million in 2021 to RMB545 million in 2022
• In 2022, the Business Volume of Club Med amounted to RMB12,011 million, representing a year-on-year surge of 108% and recovering to 99% of the volume in the same period of 2019
• For Atlantis Sanya, although its Business Volume for the year declined due to the pandemic situation in China, having outstanding product competitiveness, it maintained strong momentum in the first two months when the pandemic was under control and in July of 2022
• Stable development of new projects in 2022. Business Volume of Lijiang Foliday Town increased more than nine times year-on-year. Taicang FOLIDAY Town progressed smoothly and is scheduled for opening in the second half of 2023.
• At travel restrictions around the world easing further, the Group's businesses in China and overseas rebounded strongly. In the first two months of 2023, the Business Volume of Club Med rose by 55% as compared with the same period of 2022. The Business Volume of Atlantis Sanya and Lijiang Foliday Town rose by 10% and 149%, respectively, against the same period of 2022

(Hong Kong, 26 March 2023) – Fosun Tourism Group ("Fosun Tourism" or the "Group", Hong Kong Stock Exchange Stock Code: 1992), a world-leading leisure-focused integrated tourism group, announced today its annual results for the year ended 31 December 2022 (the "Year"). During the Year, despite the COVID variant Omicron (the "Pandemic") spreading worldwide, with major customer source countries relaxing pandemic-related travel restrictions, the Group’s business in EMEA and the Americas continued on the significant recovery track and recorded strong growth.

During the Year, the Business Volume[1] of resorts and destination operations and tourism and leisure services and solutions (collectively "tourism operation") (at constant exchange rate) amounted to RMB14,503 million (2021: RMB 7,853 million), representing a 85% growth year-on-year. The Group's revenue climbed to RMB13,778 million (2021: RMB9,261 million), increased by 49% year-on-year; Adjusted EBITDA was RMB2,345 million (2021: RMB213 million).

Club Med Business Volume doubled year-on-year

High-star resorts’ share of total capacity continued to increase

In 2022, the Business Volume of Club Med amounted to RMB12,011 million, representing a surge of 108% compared to that of 2021, recovering to 99% of the level of 2019. Its capacity increased by 62% compared with 2021 and recovered to 92% of the 2019 level. In particular, the capacity of resorts in EMEA, the Americas and Asia Pacific climbed 97%, 44% and 43% against 2021, respectively, and recovered to 86%, 104% and 90% of the levels in 2019. In 2022, the global average bed occupancy rate of Club Med was about 61%, up by 6 percentage points relative to 2021. Average daily bed rate was RMB1,468 (at constant exchange rate), representing an increase of about 15% and 20% compared with the same period in 2021 and 2019, respectively. 

Compared to its adjusted EBITDA of negative RMB136 million in 2021, the adjusted EBITDA of Club Med in 2022 increased to RMB2,188 million and returned to 96% of the level in 2019.

In 2022, business in the Americas region recovered strongly, with Business Volume up by 89% against 2021 and 33% against 2019. In North America, apart from demands in the USA, Canada and Mexico increasing, the new resorts, namely Quebec Charlevoix and Miches in Dominican Republic, which opened in 2021 and 2019 respectively, also saw increase in capacity pushing up Business Volume. The average bed occupancy rate of the two resorts reached 53% and 70% in 2022, respectively. In South America, the Group seized opportunities in the Brazilian domestic market on strong recovery. During the year of 2022, Brazil became the 5th sales market in terms of Business Volume, increased by 74% compared with 2021, and increased by 48% even compared to 2019.

The Group adhered to its upgrading strategy in developing resort business. In 2022, it opened new resorts such as the Changbaishan resort in Northeast China, the Marbella resort in Spain, Thousand Islands Lake resort in Eastern China, Yanqing Lijing (Phase II) in Beijing, New Tignes and Val d’Isere resorts in France and Kiroro Peak (Phase I) in Hokkaido, Japan. In 2022, the 4&5 Trident above capacity accounted for 95% of total capacity of the Group's resorts, up 10 percentage points when compared with 2019.

For the two months ended 28 February 2023, its Business Volume rose by 55% compared with the same period in 2022 and by 26% over that in 2019, and the Business Volume of all regions recorded growth to various extent relative to the same period in 2019. Average bed occupancy rate of the resorts worldwide reached 72%, and global capacity increased by 21% compared with the same period in 2022 and recovered to 100% of the level in the same period in 2019.

Given good bookings, the demand for Club Med in the full year of 2023 is expected to keep rising. As at 11 March 2023, the cumulative bookings for the first half year (expressed in business volume of Stays, Tours and Services and at constant exchange rate) was up by 36% when compared to that for the first half of 2022 as at 11 March 2022, and the number was approximately 25% more than that for the first half of 2019 as at 11 March 2019 (before the pandemic). The cumulative bookings (expressed in business volume of Stays Tours and Services) for Club Med for the six months ended 31 December 2023 (at constant exchange rate) increased by approximately 23% as compared to that for the second half of 2022 as at 11 March 2022 and by approximately 20% as compared to the number for the second half of 2019 as at 11 March 2019 (before the pandemic).

The Group planned to open 17 new resorts or spaces between early 2023 and end of 2025. By 2024, the Group expects annual capacity to increase by more than 20% against 2022, from new resorts added and ones renovated, offset by old resorts closing.

Mr. Henri Giscard d’Estaing, Vice Chairman and Co-Chief Executive Officer of Fosun Tourism Group and Chief Executive Officer of Club Med, said,

“Following the strong rebound in the second half of 2021, our 2022 results show a strong recovery and acceleration for Club Med in EME and Americas. The remaining travel restrictions in Asia Pacific and Covid- 19 resurgence in China have still impacted our business, but Club Med managed it globally. Our Business Volume doubled compared to last year and reached pre-pandemic level. Our operating profit is above 2019, and we achieved a positive net result, benefiting from the profound transformation of our business model.

The year 2022 was an important milestone in our strategy to move upscale. Club Med has never had, in its 73 years history, such a beautiful Resort portfolio! The premium share of total capacity continued to increase and reached 95%, and we managed to open 7 magnificent Resorts.

The outlook for the first half of 2023 is encouraging with a strong momentum in travel revenge in Asia, and we have all necessary assets to sustain a future growth, however, the acceleration remains subject to the sensitive geopolitical & economical context”. 

Mainland business remained resilient in the period the pandemic was under control and rebounded strongly after travelling resumed

In 2022, affected by the COVID-19 (Omicron) flare-ups in China, Business Volume of Atlantis Sanya decreased by 40% year-on-year to RMB877million. Room revenue and other operating revenue was approximately RMB503 million and RMB375 million, respectively. Average daily room rate increased to RMB2,440, up by 1% compared to that in 2021, and average occupancy rate was 43%.

The Group's business in China showed strong resilience during the period the pandemic was under control. On top of that, in the first two months in 2022, when the pandemic was under control, Atlantis Sanya maintained dynamic growth momentum thanks to its strong product competitiveness and release of suppressed leisure vacation demand. Its Business Volume reached RMB362 million during that period, up by approximately 44% year-on-year, which testified to its popularity as the choice destination of domestic tourists. In July 2022, at the explosive rebound in demand for summer family vacation, Atlantis Sanya’s Business Volume not only fully recovered, but exceeded beyond pre-epidemic levels, reaching approximately RMB215million. In 2023, benefiting from the lifting of COVID-19 related travel restrictions, the resort reported Business Volume of RMB399 million in the first two months, up by 10% against the same period in 2022. Average room occupancy rate was 96% and average daily room rate was RMB2,893.

In the second half of 2021, Club Med Lijiang resort, Albion Holiday Apartment of Lijiang FOLIDAY Town and lake camp started operation. Came 2022, despite negatively impacted by the pandemic resurging in China, delivering strong performance in the third quarter, Lijiang FOLIDAY Town achieved for the year Business Volume of RMB89 million and welcomed approximately 170,000 visitors.

In the first two months of 2023, Lijiang FOLIDAY Town recorded Business Volume of RMB18 million, representing an increase of 149% year-on-year, at the patronage of 27,000 visitors. Business Volume of Club Med Lijiang resort was RMB16.2 million, with average daily bed rate at RMB1,080 and average bed occupancy rate was 45.7%, pointing to a bright outlook.

Deployed and effectively executed asset-light strategy

Actively explored opportunities of bringing in strategic partners for jointly development

Since day one, the Group has adopted a light and heavy assets combined project development model. In 2022, Fosun Tourism exited capital from some of the heavy asset projects it owns to bolster liquidity and hasten transformation to the asset-light model.

The Group also actively explored opportunities to sell some own properties. In June 2022, it sold and leased back Club Med’s Greek resort Gregolimano to a French REITS Primonial REIM. The transaction generated net cash flow of RMB460 million. In September, the Group sold Sandpiper resort in the USA, generating net cash inflow of RMB386 million. As at 31 December 2022, the Group owned 11 Club Med resorts, leased 40 resorts and was offering management services to 15 resorts.

Regarding tourism destinations, based on the actual situation and its own strategic advantages, the Group is exploring opportunities of bringing in strategic partners for joint development. It does not rule out the possibility of involving strategic partners in the early development stage of future tourist destination projects, for the purposes of making better use of its integrated operating advantages and providing full-cycle management services.

Mr. Xu Xiaoliang, Co-CEO of Fosun International and Chairman of Fosun Tourism Group, said, "Although the global tourism industry continued to face various uncertainties and challenges in the past year, we managed to achieve strong rebound of our business overall thanks to our global business presence and flexible strategies. Club Med’s Business Volume and EBITDA both recorded substantial improvement year-on-year, almost back to the levels in 2019. Given the strong performance in the first two months in 2023, we are confident of seeing full recovery of our business going forward.

“Looking at 2023, with the impacts of the pandemic subsiding, release of market demand has hastened. Having made it through the tests and challenges in the past three years, the Group will be able to seize market recovery opportunities with greater resilience and more precise strategies. We will work on optimizing our capital structure, seeing our business back to being able to sustain profit growth, thus live up to the trust and expectations of shareholders.”  

[1] Business Volume represents the aggregate sales of resort service, tourism destination operation and other tourism-related services and solutions, regardless of whether the resort is owned, leased or managed.