Club Med

Case 1. Club Med: The Party Is Over

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ASE 1

CLUB MED: THE PARTY IS OVER

Club Mediterranée (Club Med), a corporation in the all-inclusive resort market, manages 140 resort villages in Mediterranean, snow, inland, and tropical locales in more than 35 countries. Its resorts do business under the Club Med, Valtur, Club Med Affaires (for business travelers), and Club Aquarius brand names. Club Med also operates tours and two cruise liners: Club Med 1 cruises the Caribbean and the Mediterranean, and Club Med 2 sails the Pacific. The company also arranges specialized sports facilities. Club Mediterranee’s clientele is about 1/3 French, with the rest being mainly from North America and Japan. Club Med found that its all-inclusive price is not as widely accepted as it has been in the past. The firm has found that consumers’ preferences have changed. Vacationers are not willing to spend large amounts of money for vacations that include many activities that the vacationers are not using as much as they had been in the past. This change in preference poses a problem for the company because Club Med’s competition has been able to customize travel packages for each consumer at prices that vacationers feel more comfortable with. Though it appears easy for Club Med to also customize travel packages, the company is at a disadvantage compared to its competition. Most of the competitors are found in a small number of locations, while Club Med has resorts scattered all over the world. Currency devaluation and political boycotts are some of the situations that Club Med faces worldwide on an ongoing basis. These external factors are reducing the company’s ability to increase sales and gain new customers. BACKGROUND AND HISTORY Club Mediterranée, otherwise known as “Club Med,” was originally founded by a group of travelers, headed by Gerald Blitz, in 1950. However, through the years, as this group was increasing in size, it was becoming increasingly more difficult to...