Interview: Club Med opens up on greenfield opportunities in SEA as travel rebounds

As the world transitions to living with COVID-19, countries are now taking concerted steps to open up its borders. Earlier this week, Malaysia lifted the travel ban, allowing interstate and overseas travel for the vaccinated population in the country. Similarly, Indonesia is gearing up to reopen Bali and the Riau Islands to foreign visitors from selected countries. Meanwhile, Singapore recently expanded its vaccinated travel lanes to nine countries including South Korea, US, Canada, Spain and the UK on 9 October. Predicting travel to gradually rebound this year, Club Med unveiled an aggressive travel rebound plan in the Asia Pacific region, targeting greenfield opportunities in Indonesia, Thailand, and Vietnam. This is part of its expansion plans to open 16 new resorts in the region by the end of 2023, including eight in China.

Despite the current disruptions to travel, Rachael Harding (pictured), CEO of east and south Asia Pacific told MARKETING-INTERACTIVE that the three Southeast Asian countries have shown continuous inbound tourism growth. "They have beautiful untouched pieces of land in incredible locations with amazing views, with great accessibility from many of our source markets and lower operating costs," she added. The company is currently renovating Club Med Phuket and has the ambition to continue growing in Thailand and Indonesia, as encouraged by their pre-pandemic year-on-year average increase in visitors of 7.49% and 11.8% between 2015 to 2019 respectively.

At the same time, Harding explained that Vietnam is a fast-growing leisure market with a robust pre-pandemic year-on-year increase in visitors of 23% from 2015 to 2019. Based on this, Vietnam has the right formulae for an exceptional Club Med experience for international and domestic guests, she added. The company's marketing plans for 2022 will be centred around travel's rebound, with much of it focusing on the reopening of its resorts across Southeast Asia and bringing guests back to excitement. Key elements of the marketing plan would include the reassurance of its guests around having a peace of mind when booking with Club Med, the safety of its resorts with its Safe Together programme.

While Harding declined to comment on the monetary value of its Asia Pacific expansion, she described its strategy as "asset-light", working alongside partner investors to design and construct resorts. Once completed, Club Med takes over operations, ensuring the distribution, marketing and commercial push by its internal network and commercial partners maximise value for the owners. She listed several intangible investments required for the launch of the new destination, such as hiring the right staff and training them, and commercial marketing through Club Med's internal and external network across the globe.

A higher than proportionate amount of funds are usually allocated to the launch of each resort. Although Harding did not specify a ballpark figure, she explained that the pre-opening budget can be utilised to create buzz around the new resort. Club Med currently has 63 resorts worldwide - 35 in EMEA, 12 in the Americas and 16 in Asia Pacific. It anticipates a 26% increase in its annual capacity by 2024, as compared to 2019.

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Younger generation a key focus for Club Med

The younger generation will be a key focus for Club Med moving forward, since they not only go online but also live online, Harding said. "This group will be the first to come back during the rebound, and will be the first to travel whenever possible," she added. With the younger generation's preference for digital channels, Club Med will be pivoting its marketing and PR strategy through online mediums, which are the key driver for businesses when it comes to targeting consumers. 

Even in the travel industry, Harding said online traffic will rebound first as it is immediate, easiest, and the fastest. Although there are many mediums to choose from when venturing into the digital world, Club Med is selective of which channels it associates itself with. In fact, it is very much determined by the target clientele and the type of content that is served through that channel. According to Harding, Club Med is a niche brand.

It is not about how big the audience is, but whether the channel can best articulate the brand who it is.

Typically, it is important to look at the local market and channels its uses. For example, Club Med is exploring Kakao in Korea and LINE in Thailand. In China, the brand has decided to pivot to Douyin due to its wide reach and the target audience using it. This is also applicable when talking about the marketing budget. Singapore, being highly digital, would have three-quarters of its marketing budget dedicated to digital on certain months of the year. Whereas for Thailand, where people still make bookings through travel agents, a smaller proportion of the marketing budget goes into digital. 

Setting itself apart from its competitors, Club Med focuses on articulating experiences rather than the size of the rooms. As with any brand that is a niche, Harding explained that customers choose Club Med for its unique proposition and all-inclusive offerings, such as trapeze, skiing, yoga, archery, and specialised family programmes.

Banking on PR, the brand leverages key opinion leaders (KOLs) and focuses on social platforms to share these experiences with its customers. However, when the pandemic hit, the brand focused on communicating and engaging with its customers. "It is our loyal customers who want to be kept in the know, and want to engage with us. Thus, we ensured that we continually engaged with them throughout the pandemic even when they could not travel. People were not searching for travel options so it did not make sense to be investing in online media buys," explained Harding. 

Additionally, Club Med launched its "Club Med at Home" campaign bringing a series of home-based activities. Designed to replicate signature offerings such as destination-themed workout videos, easy-to-follow DIY Club Med recipes, and family fun games, consumers were able to have the Club Med experience at home. 

The brand then continued to engage with guests through its latest Asia Pacific travel content series, Thrive Again with Club Med. Offering more than just travel stories, the "Thrive Again" initiative comprises a specially curated selection of digital content including local destination insights, exclusive travel tips as well as special features of go-getters within the organisation and inspirational esteemed personalities.

The focus this year has shifted to preparing for the rebound, swiftly, decisively, and impactfully. In Singapore, as part of Club Med's initiative to help people to get back to their best selves, it is partnering with PARKROYAL COLLECTION Marina Bay to bring its inaugural Body and Soul programme. This partnership with the Pan Pacific Hotels Group is proof of how Club Med is pivoting its business to bring the Club Med experience to a Singapore where there are no Club Med resorts. It marries the best of Club Med’s extensive and expertly-curated schedule of fitness classes, wellness workshops, with the hotel’s lifestyle offerings of farm-to-table experiences, spin studio, and among others. 

For markets that allow domestic travel such as China and Japan, the brand is taking the learnings from the rebound, adapting its marketing strategies to what people are looking for in all communication touchpoints. Harding believes that leisure travel would bounce back faster than business travel.

Firstly, international travellers would be driven by the heart, as many of them have missed weddings, honeymoons, family reunions, and birthday celebrations, she explained. In fact, a recent travel study that Club Med conducted in Australia showed that 63% of consumers had missed trips that were initially booked for family visitation when the pandemic hit. Another Southeast Asia travel survey indicated that the top priority for 73% of respondents was to reconnect with family members who were based overseas.

At the same time, Harding expects "workations" to be an upcoming trend. Ever since the pandemic started, the widespread adoption of remote work arrangements has increasingly blurred the lines between work and leisure. As a result, Club Med came up with new innovations which included "worktainment", where companies were offered the option to mix corporate events and conferences with a leisure trip for its employees. Club Med also rolled out a Work Hub, which involves offering private workstations within the resort to allow guests easy transit between work and play.

The COVID-19 was a disrupter that decided which brands could survive, said Harding. Labelling it as a competition among the survivors, Harding added this was a call for brands to become more creative in customer engagement. The market is no longer driven by brands. Instead, consumers now drive the market. Harding compares safety in travel to the likes of Wi-Fi, it is something that is expected of from customers, yet brands have yet to "embed something extra to turn it into a purchasing decision".  

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