Club Med targets business

Montreal: Club Med, a worldwide network of more than 110 villages that has become famous for the all-inclusive vacation concept, is beginning to market itself more aggressively to the business community.After years of selling consumers on the benefits of vacationing in...

Montreal: Club Med, a worldwide network of more than 110 villages that has become famous for the all-inclusive vacation concept, is beginning to market itself more aggressively to the business community.

After years of selling consumers on the benefits of vacationing in themed villages where accommodations, meals and most activities are included in the package, the North American Club Med operations are now pushing a version of this message to the planners of incentive travel and business meetings.

‘It makes sense,’ says Alex El-Kayem, general manager of Club Med in Canada.

‘Our strength is in our ability to create an event,’ El-Kayem says. ‘We are not in the hotel business, we are in the vacation business. We are skilled at creating events and then developing an experience around them.’

He says hotels and convention centres provide rooms with amenities, while Club Med answers ‘the need of motivating people. People will remember the week’s vacation.

‘In this [Club Med] environment, you let people be themselves,’ El-Kayem says. ‘The boss is able to get out of the hierarchical structure. The boss is still the boss, but is allowed to be more human. More in tune with the rest of the team.

‘This is not the voice from the podium,’ he says. ‘Nor is the boss able to rely on the trappings of office to give an air of authority. In the end, it’s all about building team spirit.

‘Club Med is a state of mind, a certain kind of magic. You get people’s undivided attention in an atmosphere conducive to meeting your objectives.’

Last year, Club Med accommodated 4,400 Canadians on group trips, including such companies as Bombardier, ibm, Singer, Sony, Johnson & Johnson and American Express.

In total, 30,000 Canadians travelled to Club Med destinations, 22,300 during winter months and 7,700 during summertime.

Although Club Med has facilities around the world, Canadians mostly (more than 90%) travel to the club’s 16 North American destinations.

Like most other vacation and travel-related businesses, Club Med is still fighting back from the double-edged effect of the Persian Gulf war and the recession.

Another recession-related phenomenon that has adversely affected Club Med is aggressive pricing on the part of competitors. Club Med’s fixed packages make it difficult to discount.

So, Club Med is looking with increasing optimism at increasing its share of the meetings and incentives market.

To support its marketing efforts, Club Med established a separate staff position to handle groups contact.

Dina Alves, corporate affairs manager, was recruited two years ago from the Sheraton Centre in Montreal.

A former Club Med go (a reference to Club Med village hosts, gentils organisateurs), Alves heads an internal program that is using direct mail, telemarketing and trade advertising to build this business.

El-Kayem concedes that Club Med has some image-changing work ahead to get business people thinking about Club Med villages as a venue for their meetings.

‘It’s like having a shop that specializes in Formula One racing cars,’ he says. ‘People associate it with a particular product, but it takes someone to say, `Hey, why not do a van or a family sedan?’

‘In our case we want to say, `You can holiday, and have fun while answering your business needs.’ ‘

Not all Club Med destinations are available for groups all the time. It depends on the occupancy, the season, the size of the group and the length of the stay.

El-Kayem makes all the final decisions on group accommodation. ‘Nobody quotes groups without coming to me.’

As part of its stepped-up marketing efforts, Club Med is looking at either working with different companies to help in designing custom program, or may bring this service in-house.

Says El-Kayem: ‘We are saying to our customers, `Your objective is to sell more product. What would you like to do to try to reward your people more, and in the right way. We can help you come up with a plan, whether that means something that is aimed at your own sales force or your distributors, depending on your needs.’ ‘

Almost half of El-Kayem’s time is now sepnt on developing the groups market.

‘It is the only area right now of fast expansion and progress,’ he says. ‘The group business is the future.’

At the moment, Club Med villages are averaging a bed occupancy of about 70% over the year. The January to April season is its peak time, when it runs about a 90% occupancy. The rest of the year runs about 50%. September, October and November, and February and June, are the highest demand times for groups.

In Europe, Club Med is already geared up for groups. Every new village will be set up to accommodate groups, involving facilities and services such as public relations people devoted to dealing with groups exclusively.

In North America, the orientation is just in the process of changing.

El-Kayem says the shift towards the groups market will never be done at the expense of Club Med’s core vacation business.

‘We would never take a group that would be inconsistent with the identity of the village,’ he says.

In Canada, groups range from as small as about 100 people to as many as 1,000. In Europe, a booking may be as high as 15,000 but spread out throughout the year.

As another way of stimulating the market in Canada, El-Kayem says he is considering ‘creating the need’ by, for instance, organizing a group of consultants to conduct seminars on important issues of the day to which companies may want to send individuals or groups.

‘Basically, we would be creating a holiday with some kind of enrichment program that would address any number of things like self-help, business improvement,’ he says.

‘But that is probably a year or two away. But we are definitely heading in the direction where we can become guardians of our own destiny.’