Bookings boost offers Club Med hope

CLUB MED boss Philippe Bourguignon seems fated to travel but never to arrive. After five years battling to improve the profitability of France's biggest holiday company, the man who turned Euro Disneyland into a success has announced a first-half loss of e25m (£16m) at Club Mediterranee.

But is there a ray of sunshine, maybe even a destination, around the corner? Like many of its travel industry peers, Club Med has suffered a big slowdown in bookings in the wake of last September's terror attacks on the US. Winter and spring revenues fell 14.8% to e816m. But in the past four weeks the lure of sun, sea and sand has caused an abrupt improvement, so that reservations for the summer season are now down only 6.9% on last year.

Bourguignon moved fast last October to close or mothball 11 of the group's 80 holiday villages, taking out 13.9% of capacity. So there is now a chance that the group will end the year with improved occupancy levels and lower costs - 'a combination that could lead to a smart profit recovery'.

After so many false dawns, Bourguignon declines to predict the outcome of the summer season, particularly as many holidaymakers worldwide seem to have adopted a new strategy of last-minute booking. But he conceded: 'Combined with a reduction of fixed costs and a reinforced financial situation, a better (product) offer has enabled us to improve the profitability of our villages and the satisfaction of our 'Gentils Membres' (holidaymakers).

His next move will be collaboration with an unnamed European partner to enhance customer loyalty and the sense of belonging to a club. But two uncertainties remain. First, his ability to boost business from American customers, who account for most of the reservation decline. European bookings are up 5.1% year-onyear in recent weeks, so the planned drive to improve US marketing is key.

The second question mark hangs over the planned relaunch of French fitness clubs chain Gymnase Club under the Club Med brand this autumn. Making money out of fitness clubs is tricky, but Club Med may find interesting opportunities for cross-selling holidays and club memberships.

After all, increasing the ratio of beautiful bodies in its villages can only enhance its French bourgeois appeal.