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Club Med posts 2001 loss
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January 8, 2002: 3:53 a.m. ET
French resort operator says September 11 attacks led to fall in tourists
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LONDON (CNN) - French holiday operator Club Mediterranee posted a fiscal 2001 loss as it took measures to counter a fall in bookings following September 11.
Club Med, which built its reputation in the 1970s by offering "sun, sea and sex" in resort villages, made a loss of  70 million ($78.37 million), compared with a 59 million profit the year before.
Tour operators, like Swiss holiday company Kuoni, expect 2001 profits to tumble as people become more reluctant to travel following the September attacks. Thomas Cook, a German-owned holiday operator, has cut about 2,600 jobs as holiday bookings fall.
But Club Med was in trouble before the attacks as a global economic slowdown dented demand. Since September 11, the company has spent 71 million on cost cutting measures, shedding jobs and closing resorts.
"The complexity and seriousness of the crisis which has affected the tourist industry in particular since the terrible attacks of September 11 have had a significant effect on our 2001 results and will bear consequences for the 2001/02 winter season, because of continued hesitation amongst consumers," Club Med Chairman Philippe Bourguignon said in a statement.
Bourguignon, who is best known for establishing the Euro Disney complex outside Paris, joined Club Med in 1997 and has modernised resorts and made them more family-friendly.
But he has disappointed investors in the past couple of years as they await results from a strategy of boosting the Club Med brand by promoting a lifestyle to "members" rather than aiming for mass-market tourism. Its also moving into the leisure and fitness markets.
"Nobody could have managed any better. They took the right decisions but they have been hit by the slowdown in the tourism industry right in the middle of their investment phase," Societe Generale analyst Arnaud Frerault told Reuters before the results.
"It's a company with high fixed costs which makes its profit on the last droves of clients in September and October, which was a very bad period in 2001," he added.
The net loss for the year to October 31 was slightly wider than analysts' expectations. Operating profit halved to 50 million, as sales climbed a modest 5.1 percent to 1.98 billion, in line with expectations.
Club Med noted the rise in sales was not enough to cover higher fixed costs due to the creation of new capacity in 2001.
"It is clear that since September 11, reservation habits have changed and that (our clients) are booking later... In these exceptional circumstances it would be unreasonable to give any forecasts," Club Med said in the statement.
Club Med's stock fell 1.2 percent to 46.50 in early Paris trading on Tuesday. Its shares hit a high of 106.56 on January 8, 2001 and fell to a low of 25.77 on September 11. 
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