Yann Caillère, who took over as head of Pierre & Vacances Center Parcs on 3 September 2019, announced the Change Up plan on 29 January to restore the group's profitability and make it sustainable. Changes in substance and form that he shares with us with a clear determination: to redress the balance.
When you announced your arrival in the group in mid-July, you told us that you wanted to visit the properties and meet the teams to immerse yourself in the group. What did you find out?
When I arrived in the group, I noticed many positive points. The Group has a turnover of more than 1.6 billion euros, which is growing, and a current operating profit that is increasing as well. The Group also has some great brands and beautiful sites. The direct sales rate is very high: 65% at Pierre&Vacances and 80% at Center Parcs and satisfaction and repeat business rates are high (+70% at Center Parcs).
Nevertheless, the group's net income is negative. Moreover, we need to optimize our organization towards a more entrepreneurial and responsible spirit. Hence the construction of this strategic plan in terms of both content and form.
Would you explain to us the genesis and stakeholders of the Change Up strategic plan?
This plan was worked on in project mode with 40 group managers, accompanied by external advisors over a period of 4 months, while at the same time work was done on the group's raison d'être. It was important to give meaning and define our mission in the tourism industry.
This "Change Up" strategic plan is based on 3 pillars:
The plan is based on two main axes:
- The optimization of the existing
- Targeted and profitable strategic development. The priority for Center Parcs will be Northern Europe, for Pierre & Vacances, mountain destinations.
Our objective is to improve our EBIT by 2024 by 150 million euros. In the financial year 2018/2019, the group recorded an EBIT of more than 30 million euros. For the financial year 2020/2021, we expect a return to profitability. Our ambition is to achieve a current operating margin for the business lines of 5% by 2022 and over 9% by 2024.
To achieve these results, we are also targeting an increase in sales. We will accelerate the modernization and upgrading of our offering. Pierre & Vacances' upscale offering will increase by 35% and Center Parcs' by 27%. A vast €400 million renovation plan for Center Parcs is also underway. As a result, an improvement in occupancy rates of 5 points on Center Parcs is expected, i.e. more than 80% occupancy. Optimization of the existing infrastructure, revenue management and the move upmarket should enable us to increase our average prices and therefore our revenues.
Our ambition is also to reduce our structural costs to less than 9% compared to 14% today.
In concrete terms, this means making in-depth changes to the Group, both in the properties and in less tangible functions that have an equally significant impact on the results. What do you see as the biggest challenges internally?
This plan is above all a plan for sustainable recovery and conquest. We are aware of the potential impacts of the Change Up project. Given the organisational changes planned, mainly at the head office in France, the number of redundancies envisaged is around 220 positions.
Negotiations with our staff representatives are ongoing and should be held until March with an administrative validation scheduled for April. Our new organization could be deployed as of June/July of the current fiscal year.
Our main issue is the commitment of the teams. To this end, a meeting has been organized with all employees in France, the Netherlands, Germany, Belgium and Spain.
What vision do you have of the group's corporate culture?
Our starting point was to define our raison d'être while relying on the group's values". We are the European player in local tourism, committed to ensuring that everyone finds what is essential in a preserved environment".
We are a European player, in reference to our origins and the touch we bring when we develop internationally.
At a time when we talk more and more about carbon footprint, local tourism is an important concept. The Group offers stays just a few hours' drive from home whether you are Belgian, French, German or Spanish.
Committed to helping everyone rediscover the essentials, our essentially family clientele rediscovers a real pleasure in being together. Each of our brands offers moments of sharing, particularly through activities. This is also true for millennials living in tribes, reconstituted families...
A preserved environment, echoes our CSR commitments and the security we bring to our customers by choosing our brands.
As for our values, "We are all responsible entrepreneurs" and "we cultivate living together", these are applicable both in our future business line organisation and in our integration into the territory when we set up in a new region.
I have met highly motivated and committed teams, who have every confidence in the group's future.
In what way do you see the best development opportunities for the Group's brands?
For the Center Parcs brand, development will be concentrated in Northern Europe and particularly in Germany. In 2018, we inaugurated our 6th domain. Four new domains should be signed in 2025, two of which have already been identified.
We will also develop in the asset light model through management mandates... Our objective is to sign two sites per year over the next few years. The first was signed in Belgium.
In France, our next opening is scheduled in Lot et Garonne next year. And our interest in other ongoing projects is maintained...
For Pierre & Vacances, we will focus our development on the mountains, where we wish to maintain and strengthen our leadership. In other destinations, particularly internationally, we will be using an asset light model, either under management mandate or as a franchise.
We are also going to put the accelerator on maeva.com, our distribution platform specialising in holiday rentals. Our high-growth development strategy will focus on C2C and campsites. Our objective is to reach a network of 150 affiliated campsites by 2024, i.e. around twenty franchises signed per year.