3 Min Read
PARIS (Reuters) - French holiday operator Club Med said European bookings fell 5.1 percent in the past four weeks amid a deteriorating economic climate, and it said it would cut capacity in the region for its winter and summer 2013 seasons.
Club Med, which has recast itself as a higher-end holiday operator, reported higher profits for fiscal year 2011-12, helped by strong demand in Asia and the Americas.
Club Med, which has not paid a dividend since 2001, said it may offer shareholders a share buy-back plan instead of a dividend for FY 2011-12, in view of the bumpy outlook and deteriorating climate in Europe.
Travel firms and airlines across Europe have seen bookings fall in recent months, hit by the eurozone crisis and high fuel costs.
Club Med said its holiday villages' operating income rose 1 percent to 62 million euros as revenue grew 3.7 percent to 1.515 billion euros in its fiscal year ended October 31, 2012.
As of December 1, total winter-season bookings at Club Med were up 1.1 percent, but they were down 0.6 percent in the past four weeks, the company said.
Bookings in Europe-Africa alone were down 5.1 percent in the past four weeks and Club Med said it would cut capacity by 3.7 percent for the winter season and by 6.2 percent for the summer season in the region.
Club Med operates 75 resorts in 40 countries, ranging from Caribbean beach villages to Alpine ski locations.
With a market value of 421 million euros, the group competes with global hoteliers such as Intercontinental (IHG.L) and Accor (ACCP.PA). It also competes with tour operators such as global leader TUI Travel TT.L and Thomas Cook (TCG.L)
The closely-watched metric of its holiday villages' operating income before depreciation, amortisation and provisions declined to 8.7 percent of sales from 8.9 percent at end-2011, the company said.
Net debt fell to 118 million euros from 165 million as Club Med generated free cash flow of 55 million euros and it said it would again be free cash flow positive in fiscal year 2012/13. (Reporting by Dominique Vidalon; Editing by Christian Plumb)