Shifting Sands of Fosun’s Tourism Empire
Key Insights:
- Conglomerate Fosun International mulls selling major tourism assets to reduce debt burden, sources say.
- Potential sale of Atlantis Sanya resort and Club Med stake could reshape Fosun Tourism’s future.
Debt can be a hungry beast, even in the glitzy world of conglomerates. Just ask Fosun International, the parent company steering the ship for Fosun Tourism Group. Rumor has it that Fosun is eyeing the exit door for two prized jewels in its tourism crown.
Specifically, whispers in the corridors suggest that Fosun Tourism is toeing the line to potentially jettison its Atlantis Sanya mega-resort on China’s Hainan island, in addition to scaling back its interest in the iconic Club Med resort chain. This strategic u-turn from Fosun International signifies a pivotal shift in the company’s stance, which previously preached the sanctity of its tourism investments.
The looming sales spell uncertainty for Fosun Tourism’s future landscape. If the Atlantis resort and Club Med stake find new guardians, the company’s tourism portfolio might be left a shade barren. Previous reports hint at Fosun’s flirtation with offloading the Thomas Cook package holiday tour company – yet another tile in its tourism mosaic.
Outlook for Fosun Tourism
Amidst swirling speculations, Fosun Tourism faces a crossroads. Even sans the Atlantis resort – a revenue juggernaut accounting for 10% of the company’s recent financials – Fosun Tourism could endure as a standalone entity. Conversely, its parent Fosun International might opt to divest the tourism arm altogether, turning the spotlight on its thriving pharmaceuticals and Lanvin luxury goods business lines.
The market’s mood soured after the Reuters bombshell, with shares of both Fosun entities tumbling by 6% in the days that followed. Fosun Tourism now trades at a paltry P/E ratio of 8, a curious discount compared to industry peers like Trip.com and Hilton Worldwide.
However, beneath the financial jitters lies a silver lining. Fosun Tourism’s recent profit alert hinted at a robust post-pandemic revival, with a surge in business volume to surpass pre-pandemic highs. Although a slight hiccup saw the company report a loss in its last cycle, the broader tourism sector paints a rosy picture post-COVID.
Fosun Tourism’s statement in response to Atlantis sale murmurs underscores its confidence in the company’s operational strength. Atlantis Sanya, a sprawling paradise with 1,300 rooms and a treasure trove of amenities, stands as a testament to Fosun’s grand vision and hefty investments.
Whatever fate befalls Fosun’s tourism branch, the company seems primed to navigate choppy waters in style. By tweaking its investment sail, Fosun could weather the debt storm and hitch a ride on the tourism resurgence sweeping the globe.