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CHINA. HNA Tourism Group and Pierre & Vacances-Center Parcs Group have signed a crucial strategic partnership agreement that aims to kick-start a new wave of tourism in China. These follow an earlier non-binding Memorandum of Understanding signed in July.
The agreements signal the development of Pierre & Vacances-Center Parcs concepts in China and also will lead to equity investment from HNA Tourism Group into Pierre et Vacances S.A. capital.
The agreement is subject to approvals by the French and Chinese authorities.
Both groups said they aim to develop a new type of tourism destination inspired by the Center Parcs and Pierre & Vacances concepts.
This, they said, will meet the demand from Chinese families for a tourism offering that combines proximity to large cities with short stays, outdoor experiences and leisure and sports activities for both adults and children.
The partners said: “Market analysis and studies conducted over the last few months show that there is plenty of potential in China for tourism developments based on the Center Parcs concept. This is especially the case for projects located close to the large cities of Shanghai, Beijing, Chengdu and Fuzhou.”
In addition, based on Avoriaz resort standards (for sustainable mountain development), both groups will take part in the development of mountain resorts in China. This follows Beijing’s successful bid to host the 2022 Winter Olympic Games and the anticipated increase in demand for mountain breaks by Chinese consumers.
Initial sites have already been selected according to their location, environmental quality and respective capacities in terms of construction and ski resorts.
Pierre & Vacances-Center Parcs Group Chairman and Chief Executive Gérard Bremond said: “This partnership creates the opportunity for Pierre & Vacances-Center Parcs Group to achieve its ambition of developing a responsible and sustainable tourism offering beyond Europe, and exporting its business model to the world’s largest tourism and real estate market. We are convinced that the experience of HNA Tourism Group in the Asian market and its recognised expertise in the tourism sector will be major assets to accelerate and amplify the group’s development internationally.”
HNA Group Board Member and Chairman of HNA Tourism Group Zhang Ling said: “For three consecutive years, China has held its position as the world’s largest outbound tourism market; yet the enormous potential of its domestic travel market remains underdeveloped. The near future will uncover opportunities for high-end tourism and world class brands. Following with this trend, our relationship has a very promising future and strategic meaning. This long term partnership between HNA Group, a Global Fortune 500 company; HNA Tourism, China’s sixth largest tourism group; and PVCP, Europe’s leading tourism and real estate company, will transform the layout of the tourism sector in China and across Asia.”
The new projects will be implemented via a joint venture that is 60% owned by HNA Tourism Group and 40% by Pierre & Vacances-Center Parcs. The joint venture will be incorporated by the end of 2015.
The alliance will support real estate and tourism services provided on behalf of investors from each project. It will be granted exclusivity to develop concepts inspired by Center Parcs in China.
HNA Tourism Group has committed to mobilising funding for the five first projects over the next three years, for a total investment value estimated to be around €1 billion. Beyond these projects, two projects per year are expected to be developed and funded by various institutional investors.
HNA Tourism Group will also support the joint venture in the areas of property development and procedures for administrative authorisation.
Pierre & Vacances-Center Parcs Group will contribute its expertise in property development and tourism through:
*architectural and landscaping planning and conception as well as design of each project,
*the sale of properties to individuals,
*tourism activity management – distribution and operation – of projects.
Additionally, HNA Tourism Group – through its travel agency subsidiary HNA CAISSA Travel Group – will promote European destinations of Pierre & Vacances and Center Parcs to Chinese clients.
To strengthen the strategic partnership, agreements between both groups plan an equity investment from HNA Tourism Group into Pierre et Vacances S.A. (PVSA), the listed holding of Pierre & Vacances-Center Parcs Group.
HNA Tourism Group will subscribe to a reserved capital increase representing 10.00% of PVSA capital post transaction at a price of €25.18 per share, which corresponds to a 3% premium on the 20 trading day volume weighted average price as of 6 November. Following this capital increase, SITI (a holding controlled by Gérard Bremond) will hold 39.83% of PVSA capital and 57.99% of voting rights.
Founded in Beijing in March 2007, HNA Tourism Group is one of three strategic industrial conglomerates of HNA Group, which specialises in tourism assets management. It owns and operates airlines, hotels, travel operators among other tourism businesses.
In 2014, HNA Tourism had total assets valued at about €17 billion and an annual turnover of more than €5 billion. Positioned as the sixth largest tourism group in China, it has full ownership and majority stakes in more than 20 brands such as Capital Airlines, Deer Jet, Caissa Touristic and Tangla Hotels.
