With 70 resorts worldwide and growing, Club Med has continued to bloom in what has been the very worst of times for the global travel industry. How have they managed that and what lessons can they pass on? I caught up with industry favourite Rachael Harding who has recently been promoted to CEO ESAP (East and South Asia and the Pacific) to find out more.
After three leading years as General Manager of the Pacific based in Sydney, travel industry leader Rachael Harding has recently been appointed as Club Med CEO East and South Asia and the Pacific and is set for an exciting move to Shanghai with her family, where she will be based for her next chapter.
In many ways, the timing couldn’t have been better for Rachael’s move in terms of Club Med’s continued growth in the Asia Pacific region and the fact that the travel industry at large is now seeing a much brighter light shining at the end of the tunnel.
I sat down with Rachael to find out how the company has navigated the last 18 months and how they are planning to realise the potential of the next 18 months and beyond.
How are things at Club Med?
Overall, we’re feeling positive. Throughout the pandemic, we’ve still had around about 15 resorts operating globally for domestic markets.
What that has enabled us to do is understand what has to happen in the resorts to adapt to guest needs and the changing safety and hygiene standards as the main priority.
As of July 1, 2021, we have 40 resorts open worldwide, which is approximately 60% of our network, minus our winter resorts, which are closed as per normal now until next season.
Other than a couple of resorts in Asia, all of our sun resorts worldwide will be open, fuelled both by domestic markets and sectors that can have reciprocal border and quarantine-free agreements with other countries such as America and the UK.
So that’s exciting news. Sales globally are exceeding 2019 results, and this is really positive because we have been aggressive on our global cost-saving measures as many other companies have also been forced to.
This momentum is a powerful indicator for us. If these markets are coming back quickly, you can bank on Australians wanting to go away similarly.
We’ve all done our research and our surveys to know that most of us here will want to travel as soon as we can. But I feel like the longer the borders stay closed here, the stronger the demand, the stronger the rebound.
How are new resort developments looking?
We’ve actually opened four new resorts this year. We opened Seychelles two months ago, and we’re opening Quebec Ski in December.
Speaking to our North America team, they’ve already reached half of the business volume they’re expected to for their forecast. This is a huge result for them considering it’s a massive target to make up more domestically than they thought they would’ve had to without international clientele being able to come in such big numbers yet.
We also opened two resorts in China with 13 more resorts to open in the next three years, plus many renovations extensions. Many of these are happening this year in the downtime, especially with ski, not opening yet.
Are you seeing changes in customer behaviour and expectations?
It is a balance in terms of guest behaviour and expectation before booking. That being, choosing a destination before booking and then the expectation when they get there.
Change wise, Australians aren’t being as spontaneous as they were when booking a destination previously. Aussies are so good at just, “There’s a great deal. I’ll book that in, and I’ll find a flight later.”
We don’t have that anymore. So, everyone is obviously doing a lot more research.
Before travel, the need for this flexibility in the booking is a priority. We’re finding that people really want good value over a discount and, of course, peace of mind when they’re in a destination as far as insurance and coverage.
These kinds of expectations for all companies, including us, have to make is now a given. We’re going to have to have a flexible booking in place, we’re going to always have to showcase our value and be a trusted brand, and we’re always going to have to create this peace of mind.
So how do we find that balance? How do we find the balance between still having a great holiday experience pre, post and during and adhering to the flexible safety and hygiene factors that need to underpin it all?
So, I guess that would be the big one. It’s not about 50% off; let’s go. It’s about flexibility, your peace of mind, value and then a price. It’s that shift in message hierarchy that’s really important, and as a business, we have to keep our finger on the pulse constantly because that will continue to change and evolve.
Customer expectations have already changed from last year so we know we need to give them the information very quickly for them to make that decision.
How have you stayed engaged with the industry?
From the very start, we have continually remained connected and engaged with our travel agent partners in tandem with supporting them with all that was happening from a booking point of view.
We’ve tried to be a trusted partner in every sense of the word. We’re all going through the same pain in trying to anticipate what trade is going to be asked and providing the best information for them as it relates both to our brand but just the broader travel community.
From bringing resort life in people’s homes to the evolution of safety and hygiene in resort right through to direct Q&A’s with myself and other business leaders within Club Med and our ‘Nominate a mate incentive’. We have tried to be open and transparent about our business and where it’s at and keep agents updated on the evolution of products so that they’re in the know when they’re talking to clients.
There’s not a week that goes by that we don’t have some connection or engagement. On top of that, we recently did our nationwide roadshows with our partners NCL and Globus.
We have implemented a new Club Med connect, a virtual way that travel agents can connect with their BDMs and anyone in our business. We’ve also been running quarterly on the couch sessions, which are business updates providing trends to travel agents on what’s happening in the business now and how they can capitalise on that.
Are you seeing demand from Aussies to book now? And if so, where to?
We opened sales early for 2022, so we have dates right the way through to December 22, which is the longest lead in we have ever had.
A couple of evident trends. Number one, Ski Japan is huge. Skiers have missed their hit for three seasons in a row, and while you can ski in Australia and New Zealand, people still want the powder of Japan, so the demand for Ski is still there.
The other trend is a higher average value for all bookings. People are looking at luxe destinations such as the Seychelles, Maldives and Mauritius. Places that are bucket list destinations for people which is really pushing up our average order value.
And the other big one is not destination-related but the reason people want to go, which was apparent in our survey.
Out of over 1000 people surveyed who were a mixture of Club Med clients and non Club Med clients, 68% said they had missed a milestone while not being able to travel last year. Many said the reason they will travel is to celebrate a birthday, anniversary or wedding.
We know all about this because we missed our birthday too at Club Med as we turned 70 last year.
What do you think the opportunity is for travel advisors when that gun does go off?
I feel the biggest opportunity is diversification. If you’re a travel advisor that relies solely on selling luxury or cruise or solely selling Africa, it’s going to be tough.
In the same way, we are also trying to future proof our business by diversifying the destinations we are going to be opening, including here in the Asia-Pacific region. Not having a domestic resort here anymore in Australia has been challenging.
What we’re working with agents on is the need to diversify their business. Not just where they’re selling, but who they’re selling to. Don’t be pigeonholed by a target audience and also a budget. You have to be open to all budgets as that will be key.
Trying to sell not on price alone now is key, and it’s up to us as a brand to do that due diligence around training when it comes to that. So don’t be afraid to not sell at a price because that’s what people are looking for anymore.
When the gun goes off, your brand needs to be front and centre. You want to be known as a brand that’s been trusted, and that has supported you throughout all of this. That’s why it was important for us to partner with NCL and Globus because we feel they have also done an excellent job through the crisis with their trade partners.
And we want partners to be able to have ‘go to’ brands. Behind all of this is we want agents to know that we’re going to have their backs and that they’ve got a product that will be desired, which I believe we do.
That’s how we’ve been framing it since last July. Everyone is in the starting blocks and waiting for the gun to go off, and the only person that’s going to get to the end the fastest is the athlete who is prepared.
Who wins the gold medal? The person who has put the most training in and the most preparation, that’s who wins the gold medal.
That’s been our internal mindset this whole time.
Find out more: www.clubmed.com.au