FAST NEWS: Club Med Strength Fuels Fosun Tourism Rebound in Third Quarter
The latest: Fosun Tourism (1992.HK), owner of the Club Med resort chain, said the business volume at its resort operations totaled 5.58 billion yuan ($873 million) in the first nine months of the year, down 4.4% from the same period a year earlier. The decline marked a big improvement from the first half of the year, when business volume plunged 41.9% to 2.43 billion yuan.
Looking Up: The improving performance was reflected in third-quarter results for Club Med, whose business volume more than doubled to 2.6 billion yuan during the three-month period, according to a business update from the company after markets closed on Wednesday. The company said business at Club Med is now at about three-quarters of what it was in 2019 before the pandemic.
Take Note: Business volume for the company’s Atlantis Sanya mega-resort on tropical Hainan island fell 24.6% in the third quarter, with the company blaming a Covid-19 outbreak in the city of Nanjing for a national travel downturn.
Digging Deeper: Travel-related companies like Fosun Tourism have been among the hardest hit during the pandemic, as many travelers stayed home during the worst parts of the outbreak. Things improved over the summer as many countries relaxed restrictions and high vaccination rates in many western countries emboldened people to return to such travel. Many travel-related stocks have already rallied over the past year as investors expect a strong rebound when the pandemic finally subsides.
Market Reaction: Fosun Tourism shares edged downward to lose about 2.5% in the two trading days after the announcement. The stock had nearly doubled at one point this year from its price at the start of 2021 on optimism for a strong travel recovery, and is now still up about 30% for the year.
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